Bahrain Steel Company, a subsidiary of Foulath Holding Company, one of the global leaders in the production and supply of high-quality iron ore pellets, has signed a letter of intent with Essar International Group to supply iron ore pellets to the Arab Green Steel project. The signing ceremony was held on Wednesday, August 16, 2023 in Jubail, Saudi Arabia, in the presence of a number of senior officials from both sides.
Through this partnership, Bahrain Steel will supply 4 million tons of DR pellets annually to Essar Group. It is worth noting that Bahrain Steel is the only company owned by investors from the Gulf Cooperation Council countries and is the leader in the production and supply of high quality direct reduction iron ore pellets to steel producers in the region.
Commenting on this partnership, Mr. Dilip George, CEO of Foulath Holding Group, said: “Bahrain Steel’s letter of intent with Essar Group to supply 4 million tons of iron ore pellets annually reflects our commitment to meet the growing demand for these products by the steel industry in the GCC countries. Gulf. We are proud to collaborate with Essar Group to support their pioneering project to establish the first green steel project in the Kingdom of Saudi Arabia, which will see the concept focus on sustainable development.”
For his part, Mr. Naushad Ansari, Regional President of Essar Group in the Kingdom of Saudi Arabia said: “Essar is looking forward to investing around $4.5 billion in the construction of an integrated steel plant in Ras Al-Khair, Saudi Arabia. This letter of intent, after approval and signing of the final contracts, will secure 50% of the raw material supply of iron ore pellets for the Saudi Steel Mill. If all goes as planned, we expect commercial production trial runs to begin in 2027.”
The Essar project is set to be the first green steel project in the region that aims to set a new global milestone in carbon dioxide reduction. The project will have a direct ductile iron production capacity of 5mtpa, consisting of two units of 2.5mtpa each, 4mt hot rolled coils, plus 1mt cold rolled coils along with galvanizing lines and sheets. zinc. In line with the Kingdom’s continuous demand for steel products and the goals set by Vision 2030, the facility will cater to all major value-added steel consuming industries including: structural steel, oil and gas, automotive, packaging and engineering.
On the sidelines of the signing of the memorandum of understanding, the economic advisor, Muhammad bin Saleh Al-Jabr, the former head of the Iron Company, said that the iron and steel industry in the Kingdom is witnessing an extensive movement, and that one of the results of the national iron plan that the Ministry of Industry and Mineral Resources, in cooperation with other parties in the transformation plan program, was to prepare and be approved by the High Commissioner. Focusing on the development of the private sector and the manufacturing industry, and this requires achieving balance in the current and future outputs of iron and steel factories. Therefore, these results indicated a focus on the steel flat industry to create balance as is practiced globally, as well as bridging the gap between supply and demand, neutralizing the import of these products, and encouraging local factories to contribute In improving the local content and shifting to the production of value-added flat steel products such as steel rolls of all kinds for the uses of the heavy plate and automotive industries and flat chips for the production of Tin Plate steel sheets for the purposes of covers for the food sector, dyes, refrigerators, ovens and other specialized products in addition to The pipeline sector, gas, oil and water with high specifications, which are mostly imported from abroad.
This was within a strategic plan drawn up by the Iron Company about two decades ago, but due to various circumstances that are not mentioned now, the Ministry of Investment and the Ministry of Industry and Mineral Resources have attracted major international companies to achieve these aspirations and in line with the transformation plan and with investments exceeding 30 billion Saudi riyals.
Accordingly, it is expected to increase the production capacity of the flats sector from about 2 million to about 8 million tons annually in 2027 and 2028, God willing, which will contribute to increasing the national product and resettlement of employment. This will increase the production capacity of crude steel in the Kingdom to about 18 to 20 million tons annually, which will make the Kingdom of Saudi Arabia contribute to maintaining the forefront of producing countries, not only in the Arabian Gulf, but also in the Arab world and the Middle East, which is in line with the vision of the Crown Prince to be The Middle East is at the forefront of the world industrially and economically during the coming years, God willing.