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The $10-billion joint venture of statecontrolledSaudi Arabian MiningCo (Ma'aden) and US-based Alcoa hasstarted work on a plant that would be theworld's largest fully integrated aluminumcomplex, Ma'aden has announced.The Maaden-Alcoa joint venture willstart by developing a fully integratedindustrial complex, consisting ofa bauxite mine at Ba'aitha and analumina refinery, aluminum smelter androlling mill at Ras Al-Zour, it said in astatement.'Groundbreaking has now officiallybegun to pave the way for constructionof the smelter and rolling mill thatwill serve the packaging and otherindustries'.The plant aims to become theworld's 'lowest-cost supplier of primaryaluminum, alumina and aluminumproducts', Ma'aden said.It will also be the Middle East's firstfood-grade can sheet rolling mill, KenWisnoski, a senior Alcoa executive,said in the statement.The smelter and rolling mill is to beginoperations in 2013 with the mine andrefinery expected to come on stream in2014, it added.Financing for Alcoa Inc's vastaluminum project in Saudi Arabia isalmost complete, with local banksproviding the lion's share, the chiefexecutive of the US producer told thenews media.The project, a joint venture withMaaden, the Saudi Arabian MiningCompany, will be the kind of low-costopportunity that Alcoa looks for as itdevelops its business going forward,Klaus Kleinfeld said."Everything that brings us furtherdown the cost curve and makes usmore competitive, we would consider.This (Maaden) is a great opportunity forus," he said."We made a round of presentationsto banks and there was a lot of stronginterest from the Middle East banksand also from international banks. Thefinancing is almost in place and shouldbe completed shortly. The major shareof the financing comes from Saudibanks," he said.The joint venture, in the new industrialzone of Raz Az Zour on Saudi Arabia'seast coast, will create the largestintegrated aluminum project that hasever been built. Initial annual capacitieswill be a bauxite mine of 4 million metrictons, an alumina refinery of 1.8 milliontons, an aluminum smelter of 740,000tons and a rolling mill of between250,000 tones and 460,000 tones.Alcoa started out with a 25.1% stakein the venture and has an option tobring it up to 40%. First production fromthe smelter and rolling mill is due in2013, and first output from the mine andrefinery is expected in 2014.The project requires a vastinfrastructure-including a new city-thatmany doomsayers didn't think wouldever materialize. But Kleinfeld, whojoined Alcoa in 2007 from Germany'sSiemens, said the port and city are nowin place, a rail link is almost finishedand only the power plant remains to bebuilt."We have a gas allocation so that'swhy this is at the lowest point on thecost curve, or pretty much every elementof it, from the refinery to the smelter tothe rolling mill," Kleinfeld said. "It alsohas expansion options, even though it'salready big at startup. This is a greatopportunity for us to further increase ourposition on the primary side as well asto locate ourselves in a region which isclose to where a lot of the new growthhappens these days."For aluminum producers, securinga cheap and reliable supply of energy- which accounts for around a third ofsmelting costs - is critical.Alcoa's Kleinfeld said it is very difficultto tell what the break-even price mightbe, but that 70% was likely on the highside. "So many pieces have moved onthe cost side you have special deals onenergy for some producers and there'salso volatility on the currency side,which has had a big impact on projecteconomics," he said. "I haven't run thenumbers, but I would think that 70% istoo high."About 20% of Alcoa's smelting capacityis curtailed, the result of slumpingdemand and prices during the economicdownturn in key consuming sectors likeautomotives and aerospace. There areno plans to restart that idled capacity yet,however, and the company remains theworld's biggest producer of aluminumwith 4.0 million tons of aluminum output,of which 3.4 million tons is primarymetal."We're watching where the industry isgoing but given current prices (around$ 1,900/ton) we're not going to restart,"Kleinfeld said.Growth at other Alcoa aluminumprojects hasn't stalled despite the pricevolatility, with the focus remaining on lowcost operations.