Joint stock company Saudi Arabian Mining Co. (MAADEN), Plymouth, Minnesota-based Mosaic Co. (MOS) and Saudi Basic Industries Corp. (SABIC) agreed to form a seven billion dollars joint venture to mine phosphate rock and process it into fertilizer. Ma’aden, will hold a 60 percent stake in the venture and Mosaic, the world’s largest producer of phosphate fertilizers, will have a 25 percent interest, and Sabic 15 percent.
The Wa’ad Al Shammal Phosphate Project will be built at Wa’ad Al Shammal Minerals Industrial City in northern Saudi Arabia and the processing facilities at Ras Al Khair Minerals Industrial City on the east coast will be expanded. The two locations will be linked by an existing railway. The project will have a capacity of about 3.5 million tonnes a year and start in the late 2016.
Mosaic currently mines phosrock in Florida, where it’s operating at maximum capacity. The company will invest about one billion dollars in the Saudi project, funded over four years starting this year, and market about 25 percent of the output. The joint venture partners are developing plans for a local research and development facility which will encourage the study and development of phosphate products and processes.
Ma’aden was established to facilitate the development of Saudi Arabia’s non-petroleum mineral resources and to diversify the Kingdom’s economy away from the petroleum and petrochemical sectors. The Sabic-Maaden’s venture has a production capacity of about three million tonnes per year of DAP, the fertilizer that dominates the phosphate trade. Production at the new facilities is expected to commence in late 2016 with a total production capacity of approximately 16 million tonnes per year. Ma’aden is planning downstream production of phosphoric and sulphuric acid, DCP (dicalcium phosphate) and MCP (monocalcium phosphate) used in manufacturing animal feed, PPA (pure phosphoric acid) used in food industries, and STPP (sodium tripolyphosphate) used in manufacturing detergents and other industrial purposes.
After many years of negotiations Saudi Arabia acceded to the WTO in December 2005 and with a GDP (purchasing power parity) of over 740 billion dollars it ranks as the 22nd largest world economy.