NEW YORK—Alcoa Inc., the leading U.S. aluminum producer, said on Monday that it is teaming up with Saudi Arabian mining company Ma’aden to develop a world-class aluminum industry in the Middle Eastern nation.
The Pittsburgh-based Alcoa and its partner together will invest roughly $10.8 billion to develop an integrated aluminum complex in Saudi Arabia. Alcoa will own 40 percent of the joint venture, with the rest owned by Ma’aden.
The complex will consist of a bauxite mine, an aluminum refinery, a smelter, and a rolling mill for aluminum production.
The refinery, smelter, and rolling mill will be established in the new industrial zone of Raz Az Zawr on the east coast of the Kingdom of Saudi Arabia. The complex will utilize clean energy to be assisted by the Saudi government.
Alcoa’s complex will become the first of its kind in the oil-rich nation.
“A focus on quality alongside the robust economics of the project will ensure its leading role in advancing Saudi Arabia and the region as a major hub for the aluminum and downstream sectors,” Ma’aden CEO Dr. Abdallah Dabbagh said in a statement.
Alcoa President Klaus Kleinfeld said in a statement, “We are creating a fully integrated aluminum complex that will be the most technologically advanced and cost efficient in the world. By changing the operating dynamics and cost base within our industry, the complex will be a model for the growth of aluminum in competition with other metals and is designed with the potential for future expansion.”
In the joint-venture, Alcoa will provide the technological expertise, management experience, and support for the design, construction, and maintenance of the facilities. Local and international firms will assist in construction of the project.
Shares Rise
Alcoa, a component of the Dow Jones Industrial Average, received an upgrade on its stock on Monday from Morgan Stanley. Analysts upgrade Alcoa’s stock from “equal-weight” to “overweight” on improved profitability outlook. Morgan Stanley targeted $22 for Alcoa’s stock.
Barclays Capital also upgraded Alcoa on Monday.
Shares of Alcoa (NYSE: AA) jumped on Monday trading on the news of the upgrade. Alcoa shares increased 7.9 percent to settle at $15.73 on Monday afternoon.
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