LOI: Bahrain Steel, Essar ink agreement for iron ore pellet supply
Mumbai: Bahrain Steel Company, a Foulath Holding subsidiary and a leading producer, and global supplier of high-grade iron-ore pellets, has partnered with India’s multinational conglomerate Essar Group for the supply of iron ore pellets to the Green Steel Arabia (GSA) project.
For this, they signed the Letter of Intent (LOI) on Wednesday in Jubail, Saudi Arabia, the company said here in a statement on Thursday.
Through this partnership, Bahrain Steel will deliver 4 million tons per annum (mtpa) of DR-grade pellets to Essar Group. Bahrain Steel is the only GCC-owned pellet producer and a leading supplier of high-quality DR-grade pellets to all integrated steel producers in the region.
“Bahrain Steel’s LOI with Essar for the supply of 4 million tons of DR grade pellets annually is a testament to our commitment to meet the growing demand for DR pellets by the steel industry in the GCC. We are proud to collaborate with Essar Group to support their pioneering project for setting up the first green steel project in Saudi Arabia, where there is a growing focus on sustainable development,” Dilip George, Group CEO of Foulath Holding, said.
Naushad Ansari, Country Head for Essar Group in Saudi Arabia, said: “Essar is looking at investing about USD 4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia. This LOI, post final contracts being agreed upon and signed, will secure a 50% raw material supply of iron ore pellets for the Saudi Steel Plant. If all goes as planned, we expect commercial production to begin in the year 2027.”
The Essar project will be the region’s first green steel project aiming to set the global benchmark in the reduction of carbon dioxide. The project will have a direct reduced iron (DRI) capacity of 5.0 mtpa, comprising two modules of 2.50 mtpa each, and 4.0 mtpa hot strip capacity, as well as 1.0 million tons of cold rolling capacity along with galvanizing and tin plate lines.
In line with the Saudis’ ongoing demand for steel products and the targets set by Vision 2030, the facility will cater to all major steel-consuming industries including construction, oil & gas, automotive, packaging & general engineering.
(VP)
