Saudi multi-commodity hubs to contribute $9b annually to non-oil GDP
Saudi King Salman is scheduled to inaugurate one of the largest and most ambitious industrial city projects in the Middle East on Tuesday
Saudi King Salman is scheduled to inaugurate one of the largest and most ambitious industrial city projects in the Middle East on Tuesday.
Ras Al Khair, a $35 billion multi commodity minerals hub located in the Kingdom’s Eastern Province, has been an ongoing initiative for over 10 years and is set to play a central role in the development of key non-oil industries in Saudi Arabia.
It is a key example of how the Kingdom’s leadership is delivering on the goal of Saudi Vision 2030 to reduce dependence on oil-based income and facilitate national economic diversification.
Equally as important, the city demonstrates the Vision’s objective to build entire industrial value chains locally, especially as it is home to mining giant Maaden’s integrated aluminium and phosphate operations.
Ras Al Khair is set to generate thousands of jobs directly and indirectly for the local workforce and contributes $9 billion annually toward Saudi Arabia’s non-oil gross domestic product.
In addition to the aluminium and phosphate complexes, the city is supported by key infrastructure including a 1,400-kilometer railway connecting to the main mines in the country, a major port supporting exporting operations, one of the world’s largest desalination and power plants and a fully functioning village for workers.
The city’s various key facilities will be formally inaugurated by King Salman in a special ceremony under the title “The inauguration of Ras Al Khair, the center of Saudi mining.”
Ras Al Khair Port
The SAR3 billion ($800 million) port at Ras Al Khair, developed by the Saudi Ports Authority, is one of the most modern in the world and was built to serve as an export hub for petrochemical, phosphate and aluminium products created at nearby processing facilities.
In the future thousands of vessels will berth at Ras Al Khair and tens of thousands of tons of locally-produced products will be exported from the port. The city will also receive building materials and equipment by sea that will be needed for further development of its infrastructure.
The huge quantities of minerals that come from Saudi mines are processed and transported to quayside via loading belts. Another key advantage of the port is its ample space to expand to meet any future needs.
The aluminum facilities
Ras Al Khair is home to Maaden Aluminum, one of the most modern, efficient, and fully integrated aluminum complexes in the world, fulfilling Maaden’s strategy to deliver the entire aluminum value chain from “mine to market”. It has provided 3,733 new jobs, 65 percent held by Saudi citizens.
The SAR40.5 billion ($10.8 billion) project is a joint venture between Maaden (74.9%) and Alcoa (25.1%).
Maaden Aluminum’s mine is located in the north of the country, while its multi-plant facility at Ras Al Khair consists of an alumina refinery, smelter, rolling mill and one of the largest recycling facilities for beverage cans in the Middle East and North Africa region.
The phosphate facilities
Maaden’s initiative to produce international grade phosphate fertilizers has resulted in one of the biggest integrated phosphate projects in the world known as the Maaden Phosphate Company. The SAR21 billion ($5.6 billion) project currently produces approximately 3 million tons of phosphate fertilizer annually, serving 10 percent of the global phosphate fertilizer market. It is a joint venture between Maaden (70%) and the Saudi Basic Industries Corporation (SABIC) (30%) that has provided jobs to 1,700 Saudis.
There are four modern phosphate plants at Ras Al Khair that process the mineral.
Ras Al Khair features a dual-function water desalination and power plant considered to be one of the biggest of its kind in the world, employing state-of-the-art construction methods and technology. The station was named the best desalination plant in the world at the 2015 Global Water Summit in Greece.
Still in the first stage of production, the project currently has an annual production capacity of 1.025 million cubic meters (m3) of desalinated water and 2,400MW of electricity.
The project, which offers 1,700 jobs, will eventually also supply Riyadh and Eastern Province governorates with around 1 million cubic meters of water. The plant entered full commercial operations at the end of March 2016. Around SAR27.4 billion (US $7.31 billion) was spent to establish the facility and other related water projects.
The railway facilities
Railway transportation has become a vitally important enabler of the Saudi mining industry thanks to its capacity, reliability, safety and security and because of its minimal impact on the environment.
The Saudi leadership implemented plans in 2006 to develop a reliable railway, not just to support the mining industry, but to provide an integrated transportation network linking the central, northern and eastern regions of the Kingdom suitable for the transport of passengers and general freight as well as heavy goods such as minerals, petroleum and petrochemicals.
As a result, the Saudi Railway Company (SAR), solely financed and owned by the Public Investment Fund, was established to oversee the construction and operation of the key SAR25 billion ($6.67 billion) North-South Rail (NSR) project, which offers 3,000 jobs.
This article was first published by the Saudi Gazette on November 27, 2016.