The joint venture between Aluminum giant Alcoa Inc. (AA) and the Saudi Arabian Mining Company Ma’aden announced the achievments of the First Hot Metal milestone, with the commissioning of the first of 720 smelting furnaces at its Ras Al Khair facility in Saudi Arabia. The facility will start commercial production in the near future.

The First Hot Metal was achieved within 29 months of the start of construction. Natural resources, human resources, and government support led to the success of the joint venture. The expertise of Ma’aden and its regional strength as well as the global presence of Alcoa were mainly responsible for the success of the project.

The smelting system operated by Alcoa and Ma’aden joint venture will be the lowest-cost producer among other smelting systems of Alcoa around the world. It will help Saudi Arabia become the regional leader in the global aluminum industry.

Alcoa entered into a joint venture with Ma’aden to develop the largest and lowest-cost integrated aluminum facility in the highly populated Middle East region, where infrastructures are provided to keep pace with growing consumer demand. The project leverages efficiencies from integrating the mine, refinery, smelter, and rolling mill, and from low energy costs embedded in a brand new infrastructure environment.

Alcoa reported a loss of $143 million or 13 cents per share for the third quarter of 2012, driven by a hefty charge associated with environmental remediation and legal settlement as well as lower aluminum pricing. It compared with a profit of $172 million or 15 cents in the year-ago quarter.

Excluding one-time special items (a $175 million charge mainly related to environmental remediation of the Grasse River and the settlement of a civil lawsuit with Aluminum Bahrain), Alcoa earned $32 million or 3 cents a share in the quarter compared with the Zacks Consensus Estimate of a break even result.

Revenues decreased 9.1% year over year and 2.2% sequentially to $5,833 million, but were ahead of the Zacks Consensus Estimate of $5,565 million. Alcoa stated that aluminum prices dropped 17% year over year and 5% sequentially in the third quarter.

Alcoa witnessed strong productivity growth in its upstream and downstream businesses in the quarter on the back of higher utilization rates, process innovations, lower scrap rates and usage reductions. The company saw healthy demand across the aerospace and automotive markets in the quarter.

The company has lowered its 2012 forecast for global aluminum consumption to 6% from its earlier projection of 7%, owing to the slowdown in China. However, the company, expects the aluminum market to double in 2020 from the 2010 level as it is already ahead of the required compound annual growth rate of 6.5%.