South Korean contractors sees off Hanwha despite having bid higher for the project
The Saudi Arabian Mining Company (Maaden) and the US’ Alcoa has awarded the engineering, procurement and construction (EPC) contract for the aluminium rolling mill project at Ras al-Zour in Saudi Arabia to South Korea’s Samsung Engineering.
A letter of intent has been signed between the joint venture partners and Samsung with a value of about $590m being put on the deal. Samsung beat fellow South Korean company Hanwha Engineering & Construction to the deal, despite submitting a slightly higher bid.
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“Obviously Maaden and Alcoa decided that the Samsung bid was better, despite being higher than Hanwha’s,” says a contracting source familiar with the deal. “Samsung is already working with Maaden on a fertiliser project in Ras al-Zour, so maybe that had some bearing on the events.”
The source adds it is unclear as to whether recent media reports from South Korea regarding Hanwha Group chairman Kim Seung-yeon being indicted on embezzlement charges had an impact on the deal for Hanwha (MEED 1:2:11).
“From what I can gather, no reason was given either way as to why the slightly higher bid from Samsung was selected,” says the source.
Seung-yeon was indicted by South Korean prosecutors, along with 10 other group executives, on charges related to the embezzlement of hundreds of millions of dollars from the company.
The rolling mill will have a capacity of 380,000 tonnes a year when completed, which will make it the largest mill constructed outside of China in the past 20 years. The plant will produce can stock that will be sold within Saudi Arabia and the rest of the GCC.
The Ras al-Zour complex will also include a 1.8 million tonne-a-year (t/y) alumina refinery and a 740,000 t/y aluminium smelter, with a 4 million t/y bauxite mine being built at Al-Baitha.
Maaden holds a 74.9 per cent stake in the aluminium complex, while Alcoa owns the remaining 25.1 per cent.
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