Sunday, March 28, 2010


SR278m deal inked for operation of industrial railway


Saudi Arabian Railway (SAR) has signed a SR278 million agreement with India’s state-owned Rites company for the operation of a major mineral railway linking the northern Jelamaid region with Ras Azzour near the industrial port city of Jubail.

Romaih bin Muhammad Al-Romaih, deputy CEO of SAR, said the contract would be valid until the end of 2013, adding that it was signed for operating the railway line for the transportation of phosphate and bauxite from Jelamaid to processors in Ras Azzour.

The new 1,486-km north-south railway, which opens by the end of this year, would make Saudi Arabia a leading supplier of phosphate and bauxite in the world. Passenger traffic on the route would start in 2013 with trains passing by Riyadh, Sudair, Qassim, Hail and Al-Jouf.

“The value of the contract depends on the volume of minerals and goods that are transported through the railway during the contract period. In accordance with present estimates, it would reach SR278 million,” Al-Romaih said. “We have already constructed 800 km of railway of the 1,486 km project,” he said.

SAR signed a deal in 2009 with EMD, an American company, to manufacture locomotives, and another agreement with China’s CSR company to manufacture carriages to transport phosphate. “The new locomotives and carriages will reach the Kingdom by September this year,” he added.

“This railway line is very important for our mining industry as it will help transport raw minerals in a secure and economic manner. A goods train will carry 15,000 tons in one trip, the load of 600 trucks,” Al-Romaih said. Last December, Saudi Arabian Mining Company (Maaden) signed a SR40.5 billion contract with Alcoa, the world leader in aluminum, for the development of a fully integrated aluminum industry in the Kingdom.

Maaden President and CEO Abdallah Dabbagh said the joint venture would become the world’s pre-eminent and lowest-cost supplier of primary aluminum, alumina and aluminum products with access to the growing markets of the Middle East. He added that the project would be implemented in two phases, that production from the aluminum smelter and rolling mill would start in 2013, and that production from the mine and refinery was expected in 2014.

Maaden will own 60 percent of the joint venture, while Alcoa and its partners the remainder.

In its initial phase, the joint venture will develop a fully integrated industrial complex including a bauxite mine with an initial capacity of 4,000,000 metric tons per year, an alumina factory with an initial capacity of 1,8000,000 (mtpy), and an aluminum smelter with initial hot-mill capacity of between 250,000 and 460,000 mtpy.

“The mill will initially focus on the production of sheet, end and tab stock for the manufacture of aluminum cans and potentially other products to serve the construction industry,” Dabbagh said. The refinery, smelter and rolling mill will be established in Ras Azzour.