 "Essar group to source pellets from Bahrain Steel for Saudi factory")
The Essar group has signed a letter of intent (LoI) with Foulath's subsidiary, Bahrain Steel, to source 4 million tonne of DR (direction reduction)-grade pellets per annum (mtpa) for its upcoming integrated steel plant in Ras Al Khair, Saudi Arabia.
Bahrain Steel is the only GCC (Gulf Cooperation Council)-owned pellet producer and a leading supplier of high-quality DR-grade pellets to all integrated steel producers in the region, the statement said. The LoI signing ceremony was held on Wednesday in Jubail, the Kingdom of Saudi Arabia (KSA).
Naushad Ansari, Essar group country head in KSA, said that Essar was looking to invest about $4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia. “This deal will secure a 50 per cent 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,” he added.
Dilip George, group chief executive officer, Foulath Holding, said, “Bahrain Steel's LoI with Essar for the supply of 4 mt 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.”
The Essar project is set to be the region’s first green steel project and aims to set the global benchmark in the reduction of CO2. The project will have a direct reduced iron capacity of 5 mtpa, comprising two modules of 2.5 mtpa each, and 4.0 mtpa hot strip capacity, as well as 1 mt of cold rolling capacity along with galvanizing and tin plate lines.
The facility would cater to all major steel-consuming industries including construction, oil & gas, automotive, packaging, and general engineering.