National Industrialization Co. Announces an update on Delay of operation for Ilmenite Smelter Project for the production of high-grade titanium feedstock

Element List	Explanation
Introduction	With reference to the announcement published on Tadawul on September 16, 2021 relating to the Ilmenite Smelter Project for the production of high-grade titanium feedstock (the ‘Plant’), The National Industrialization Company (TASNEE) announces that after the implementation of all required modifications by Metso Outotec and the relevant contractors, the mechanical completion was achieved on October 30th 2021 followed by start-up preparations and heat-up of the furnace. The start of the plant for the trial operation commenced and produced (Titanium Slag) as well as first batch of (Pig Iron) on December 5th 2021.

Element List

Explanation

Introduction

With reference to the announcement published on Tadawul on September 16, 2021 relating to the Ilmenite Smelter Project for the production of high-grade titanium feedstock (the ‘Plant’), The National Industrialization Company (TASNEE) announces that after the implementation of all required modifications by Metso Outotec and the relevant contractors, the mechanical completion was achieved on October 30th 2021 followed by start-up preparations and heat-up of the furnace. The start of the plant for the trial operation commenced and produced (Titanium Slag) as well as first batch of (Pig Iron) on December 5th 2021.

The furnace load will ramp-up from the current 18MW, to 30 MW by mid-January 2022. This is the first holding point which is planned to last 90 days, with the aim to optimize the operating parameters of the furnace. The success of the operation run at the first holding point then will be followed by ramping the load up gradually to around 45MW (70% of design capacity) by end of Q2 2022, the target load for the execution of sustainable operation test. It is targeted to achieve this milestone in Q4 2022. Only thereafter will the furnace load be increased to design capacity of 60 MW.

The slagger plant in Jazan is the first smelting plant being built with this large capacity using brush arc AC technology for Ilmenite smelting from Metso Outotec, thus demonstration of technology and overcoming operational and technical challenges is required to declare the success of the project. It is worth to note that the gradual increase of load is a common practice for similar metal smelting industries in order to ensure the furnace integrity at the different levels of power loads and production rates. Previous Announcement Delay of operation for Ilmenite Smelter Project for the production of high-grade titanium feedstock Date of Previous Announcement on Tadawul's Website 2021-09-16 Corresponding to 1443-02-09 Percentage of fulfilled achievement 100% Event's Expected Completion Date The company is targeted to achieve sustainable operation in fourth quarter of 2022 as this industry takes a long time to reach the sustainability of operation and production. Reasons for Exceeding the Announced End Date NA The costs associated with the event, and if they have changed or not with indication of the reasons. Metso Outotec company will bear the costs of the design modifications. Impact of the Delay on the Company's Financial Results The financial impact of this project on TASNEE's consolidated results cannot be determined at this stage. Any further developments will be announced in due course. Additional Information Please note that TASNEE owns 50% of this Project and the rest is owned by CRISTAL (which is 79% owned by TASNEE).

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