Ma'aden to join big league in fertilisers

Saudi Arabia's state-owned Ma'aden Phosphate is set to become a major exporter of an important fertiliser when it starts commercial production from a new plant next year. Khaled al Mudaifer, the vice president of phosphates and new business development at Saudi Arabian Mining Company, or Ma'aden, said the US$5.5 billion (Dh20.2bn) plant would be commissioned early next year.

Commercial production of the fertiliser diammonium phosphate (DAP) would begin by the end of June, ramping up to 2.6 million tonnes annually during the second half of next year and 2012. "Our schedule is still intact," Mr al Mudaifer told a fertiliser conference in Dubai organised by the Gulf Petrochemicals and Chemicals Association. Ma'aden is one of two partners in the Ma'aden Phosphate joint venture, which mines phosphate rock in the north of Saudi Arabia and converts it into phosphate fertilisers. The other partner is Saudi Arabia Basic Industries Corporation (SABIC).

The DAP plant is one component of an integrated project aimed at exploiting Saudi Arabia's huge reserves of phosphate minerals to develop a new source of export revenues for the kingdom. The project includes a new port at Ras al Zour being built at a cost of $4bn, as well as a $3bn 1,500km rail network, of which more than 1,000km are already built, to transport output from the mine to the industrial facilities at Ras al Zour.

Mr al Mudaifer said SABIC would market DAP for Ma'aden Phosphate, using the same channels it had developed for sales of nitrogen fertilisers, of which it is a major producer. SABIC has a number of plants at Ras al Zour that produce various oil and gas-based chemicals including the nitrogen fertiliser urea. Significant opportunities existed for synergies between the fertiliser operations of SABIC and Ma'adan Phosphate, Mr al Mudaifer said.

Mike Nash, the head of fertilisers at the UN Food and Agriculture Organisation's international fertiliser development centre, said the Ma'aden project was the largest of a number of developments in Gulf states and North Africa, and would boost the region's importance in the international phosphate fertiliser market. India, with its rapidly growing market for fertilisers to improve crop yields and food security, was likely to be the main buyer.

Morocco and Tunisia also have substantial reserves of phosphate minerals and export phosphate fertilisers. A large capacity expansion was under development in Tunisia, said Mr Nash. Mr al Mudaifer said Riyadh was developing Saudi Arabia's mineral potential as a "third pillar of Saudi industry", along with oil and petrochemicals. In addition to phosphate resources, Saudi Arabia has significant gold deposits in its western region and large bauxite deposits in the centre of the country that Ma'aden is mining for aluminium.