BEIJING (AFP) – Two Chinese companies have signed a framework agreement to build two aluminium processing plants and related facilities worth nearly five billion dollars in Saudi Arabia, state media said Friday.
According to terms of the agreement signed in April, the two Chinese contractors will help the Saudi company Western Way for Industrial Development Co. obtain funds equivalent to half of the project costs from Chinese policy banks, the China Securities Journal said.
The China Nonferrous Metal Industries Foreign Engineering and Construction Co (NFC) will build an alumina plant and an electrolytic aluminium plant in the southeastern Saudi city of Jazan, the report said.
China National Machinery Industry Corp will construct a dock and a power plant supporting the plants, it added.
No other details on the Saudi company were provided.
The alumina plant will have annual output of 1.6 million tonnes while the capacity of the electrolytic aluminium plant will be 660,000 to 700,000 tonnes. Total investment in the two plants alone will be about three billion dollars.
The report said the NFC has formed a strategic partnership with a US metal trading company in hopes of taking a stake up to 25 percent stake in the two plants.
With domestic alumina running short and prices surging, the Chinese government has been encouraging local companies to seek overseas supplies.
In March, Beijing approved a plan to form a 651-million-dollar joint venture with an Indian company to produce aluminium in west India.