Alcoa Inc.
(
AA
) and Ma'aden announced the commencement of work of product mix for
their new aluminium complex, which is currently under construction
at Ras Al Khair in Saudi Arabia. The new line will offer automotive
heat-treated and non-heat-treated sheet, building and construction
sheet, and foil stock sheet.
The new product mix will enable the two companies to produce
about 100,000 metric tons of a wide range of downstream products
favorable for the company's complex product line. The project
includes the best quality standards and ensures cost advantages,
thus making Saudi Arabia one of the primary aluminum producers.
The project also takes into account the national strategy of
developing national resources, thereby creating employment
opportunities and national wealth. The project also replaces the
imports with cost-effective, high-quality domestic products, while
encouraging the expansion of the national industrial base.
Fluor, a global engineering company, will manage the development
works while SMS Siemag will supply the mill equipment and heat
treatment line equipment. The complex's smelter and rolling mill
are expected to begin production in 2013. The aluminum smelter is
expected to have an initial capacity of 740,000 metric tons per
year while the rolling mill will be within the initial capacity of
380,000 metric tons per year.
In addition to the smelter and rolling mill, the joint venture
will include a bauxite mine with an initial capacity of 4 million
metric tons per year and an alumina refinery with an initial
capacity of 1.8 million metric tons per year. The first production
of the mine and refinery is scheduled for early 2014. Alcoa will
provide alumina feedstock for the smelter in the interim.
Currently, Alcoa retains a Zacks #3 Rank, which translates into
a short-term (1 to 3 months) Hold rating. We have recommended the
shares of the company as Neutral for the long-term (more than 6
months). The company faces stiff competition from
Aluminum Corporation of China Ltd.
(
ACH
),
Rio Tinto plc
. (
RIO
) and
BHP Billiton Ltd.
(
BHP
).
ALCOA INC (
AA
): Free Stock Analysis Report
ALUMINUM CP-ADR (
ACH
): Free Stock Analysis Report
BHP BILLITN LTD (
BHP
): Free Stock Analysis Report
RIO TINTO-ADR (
RIO
): Free Stock Analysis Report
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