A railway to transport phosphate and bauxite ore that would serve a project Saudi Arabian Mining Company is developing is expected to be in operation by the end of this year, state news agency SPA said on Saturday.

The mineral line would link the phosphate mine at al-Jalamid and the bauxite mine at Az Zabirah to the processing facilities at Ras Azzour, on the Gulf coast.

'So far, 800 kilometers of the 1486 km railway has been executed,' SPA reported citing Rumaih al-Rumaih, the deputy chief executive at the Saudi Railway Company, as saying.

The state-owned firm has signed a contract worth 278 million riyals with ($74.13 million) Indian government firm Rites to operate the railway, SPA said. The contract would last till the end of 2013, SPA added.

Maaden, in a joint venture with Saudi Basic Industries Corporation (Sabic) is doubling capacity at its Saudi fertiliser plant to 6 million tonnes per year.

The project will use phosphate from a deposit at al-Jalamid and local gas and sulphur supplies to manufacture the fertiliser diammonium phosphate (DAP).

Maaden is also building with US aluminium giant Alcoa a $10.8 billion aluminium complex at Ras Azzour which would start production in 2013.

Maaden has said both the phosphate and aluminium projects rely on the development and operation of a port to export DAP and ammonia for the phosphate project and for the import of raw materials, and export of alumina and aluminium for the aluminium project.-Reuters