The complex, which will range from a bauxite mine to production facilities, will be developed in two phases with initial production expected in 2014.

Ma'aden will own 60 per cent of the joint venture. Alcoa will control the other 40 per cent through an investment partnership in which it will own 20 per cent.

Alcoa and its partners will invest US$900 million over a four-year period, as well as their share of the project financing.

Bauxite mine coming

The refinery, smelter and rolling mill will be established in an industrial zone of Raz Az Zawr on the east coast of Saudi Arabia. A bauxite mine will be developed at Al Ba'itha, near Quiba.

"By changing the operating dynamics and cost base within our industry, the complex will be a model for the growth of aluminium in competition with other metals," Klaus Kleinfeld, Alcoa president and CEO, said in a statement.

The Alcoa and other corporate deal-making carried stocks sharply higher Monday in New York.

Major stock indexes rose more than one per cent in midday trading after French drug maker Sanofi-Aventis SA announced plans to buy health-care products company Chattem Inc for US$1.9 billion, and mining equipment maker Bucyrus International Inc said it will buy Terex Corp's mining equipment division for US$1.3 billion.

Dutch auto maker Spyker Cars also submitted a new offer to buy Saab from General Motors Company.

Phil Orlando, chief equity market strategist at Federated Investors, said the flurry of corporate-deal activity is giving the stock market a major boost of confidence.

"Companies are using their cash to go out and make some strategic acquisitions," Orlando said. "They believe the economy has bottomed and will continue to improve."

Alcoa was the biggest gainer of the 30 stocks that make up the Dow Jones industrial average, jumping by US$1.36, or 9.3 per cent, to US$15.94 in midday trading after an analyst upgraded the stock.

- AP