Saudi Arabian Mining Co (Maaden) is seeking a 7 billion riyal ($1.86 billion) loan from local banks, a Saudi banker told Reuters on Wednesday.

Maaden said in March that it plans to add a new production line, with a capacity of 100,000 tonnes per year, at its aluminium joint venture with US firm Alcoa to produce sheets used in the automotive and construction industries.

It said that financing for the project will be announced at a later date.

'It is a 7 billion riyal loan for five years,' the banker, who declined to be named, said, adding that the loan will be finalised by the third quarter of this year.

HSBC Saudi Arabia, an affiliate of HSBC, will be the lead arranger, he said. A spokesman for Maaden could not immediately comment.     

The aluminium complex is owned 74.9 percent by Maaden and 25.1 percent by Alcoa.

In February Maaden said it plans to invest 21 billion riyals in a phosphate project as part of a new industrial city in the country's north. - Reuters