DUBAI- Saudi Arabian Mining Company (Ma'aden) is seeking to refinance around $1 billion of bank debt raised for its subsidiary Ma'aden Bauxite and Alumina Company (MBAC), three banking sources familiar with the matter said.

State-controlled Ma'aden has hired BNP Paribas and National Commercial Bank to advise it on the fundraising and has been in talks with banks over recent weeks for a refinancing facility expected to be denominated in both riyals and U.S. dollars.

Sources said the transaction was expected to be in the region of $1 billion but it had not been finalised. The company did not immediately respond to a request for comment.

MBAC, which is 74.9 percent owned by Ma'aden and 25.1 percent owned by Alcoa, was set up in 2009 and is one of three ventures owned jointly by the companies through which Ma'aden carries out its aluminium operations.

The other two subsidiaries, as well as other parts of Ma'aden's business, have raised financing through various debt instruments over the past few years.

The original cost of the MBAC project was around 13 billion riyals ($3.5 billion), with debt financing, agreed in 2011, of more than 8 billion riyals.

Funding came through project financing facilities provided by commercial banks, Saudi Arabia's Public Investment Fund and the Saudi Industrial Development Fund.

Ma'aden aims to complete the MBAC refinancing by the end of the second quarter, one of the sources said.

Last month Ma'aden Phosphate Company sold a 3.5 billion riyal sukuk, to replace some of the unit's existing debt. ($1 = 3.7500 riyals)

(Editing by Robin Pomeroy) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))