Rio Tinto joint venture with Saudi firm under review

Dubai/Riyadh: Rio Tinto Alcan said on Monday it will review a $10.6 billion (Dh38.9 billion) aluminium joint venture with Saudi firm Maaden, and sources close to the project said it could be delayed by one to two years.

"We are looking at the technical and financial feasibility of all our projects, this is not unique to Maaden," Dick Evans said at an industry conference in Dubai.

"The current global financial markets merit a pause to re-look at the long term planning for these projects to see how we can optimise them," Evans said.

Maaden determined

A source working on the 740,000-tonne-per-year smelter project said before Evans made his remarks that Maaden would still push it through with or without its partner should Rio decide to drop it.

A Maaden executive could not confirm if Rio Tinto is considering abandoning the plan and Piers Taylor, a Maaden spokesman, could not immediately comment.

A Khobar-based executive overseeing Maaden's aluminium project said on condition of anonymity that the project could be delayed by up to two years now that market conditions have changed.

"The board will decide within three weeks or before the end of this year at the latest if we should go for a one-year delay or two years," he said.

Maaden is investing 60 billion riyals in projects including phosphate, bauxite, gold and industrial minerals. The company's chief executive Abdullah Dabbagh said in October all his company's projects will be reviewed because of the impact of the financial crisis but declined to give a time frame for decisions on the aluminium plant.

Maaden said in July the venture was still viable despite a 40 per cent increase in costs. Dabbagh was quoted as saying in August the group planned to borrow as much as $8 billion in the third quarter of next year to finance the project.