Saudi Arabian Mining Company (Ma'aden) said on Monday its $10.8 billion joint aluminium smelter with US-based Alcoa has started commercial operations.

The aluminium plant at Ras al-Khair, on the Gulf coast of the kingdom, had experienced issues during the initial start-up phase last year when it had to shut one of its two smelting lines in October due to problems encountered during ramp-up.

The smelter has a production capacity of 740,000 tonnes a year of aluminium, with commercial operations to begin impacting Ma'aden's financials from the third quarter onwards, it said in a bourse filing.

The Saudi project is important to Alcoa, both because of its size and the fact it should be the facility with the lowest production costs in the world - important at a time when the industry pushes to cut expenses.

Alcoa owns 25 percent of the joint venture, with Ma'aden holding the balance. – Reuters