Industry Development

There is massive worldwide demand for rare earth metals, metallic minerals and processed metals. Population growth and economic development - particularly in Asia, Africa and parts of South America - are pushing prices to record levels.

The Kingdom of Saudi Arabia's (KSA) Minerals and Metal Processing cluster is one of five industrial clusters targeted for expansion in the Industrial Clusters program (IC).

The aims of the Industrial Clusters program include economic diversification, import substitution and increasing exports. In steel and aluminium for example, imports could be substituted in areas such as bar, rebar, plate, sheet and heavy fabrications. Under the plan, as Saudi Arabian production increases, so will KSA-based research, maintenance, training, testing, logistics and other related services.

Saudi Arabia is rich in rare earth metals such as tantalum and niobium, materials of strategic importance in advanced applications such as turbines, capacitors, medical implants and thin-film coatings. Industrial Clusters aims to encourage investor interest in producing value-added rare earth products such as niobium oxide, niobium tantalum alloy and ferroniobium.

Saudi Arabia is also rich in bauxite, an aluminium ore, and from this Industrial Clusters is working to increase significantly KSA's aluminium production capabilities and capacity.

Majority-owned by the Government, Ma'aden (Saudi Arabian Mining Company) is active in KSA's minerals and metal processing sector, particularly in aluminium, gold, silver, copper, zinc, lead, phosphate and industrial minerals.

In 2009 Ma'aden signed an agreement with US aluminium giant Alcoa to build a $10.8 billion aluminium production complex at Ras Al-Khair (previously Ras Al-Zawr) Mineral Industrial City. Located 75 km north of Jubail, Ras Al-Khair is road and rail served and also has a new port, intended primarily for exports such as aluminium products, ammonium phosphate, and phosphoric and sulphuric acid.

To be one of the largest operations of its kind in the world, the complex will be fed by trainloads of bauxite from Ma'aden's Az Zabirah mine. The company also operates a bauxite mine at Al Ba'itha.

The Ma'aden-Alcoa joint venture's smelter will produce 740,000 tonnes of aluminium a year from 2013; its refinery will produce 1.8 million tonnes of alumina a year from 2014; and its rolling mill - the first of its type in the Middle East - will have an initial hot-mill capacity of 380,000 tonnes a year from 2013, mainly for manufacturing cans.

Saudi Arabia produces around 5 million tonnes of crude steel a year, making it 28th in the world. Investment in the sector includes United Gulf Steel's rolling mill at Jubail Industrial City; and Rajhi Steel's $4 billion stainless steel complex at King Abdullah Economic City, due to open in 2016.

Priorities of the Industrial Clusters program include the development of:

  • A flat-rolled aluminium mill to produce automotive, construction and other sheet panels
  • A multi-purpose aluminium rolling mill for products such as wire, rod, foil and packaging
  • An aluminium foundry to produce power train, wheel and other castings
  • Mini mills capable of producing high-quality steel sheets for the automotive, marine, household appliance and other sectors
  • Plants to produce speciality steels, for example for tools, rod, wire and bearings
  • An iron/steel foundry to produce pumps, valves and other castings
  • Copper processing facilities to produce copper and alloy rod, cable, tubing, plate, pipe and sheet
  • Metal processing facilities for forging, machining, stamping, heat treating and plating
  • Brass alloy production
  • Magnesium and zinc powder production

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