The Indian conglomerate Essar Group established a partnership with the Foulath subsidiary Bahrain Steel on Thursday in order to supply iron ore pellets for the Indian group’s future Green Steel Arabia (GSA) steel project in Saudi Arabia. Bahrain Steel is a major producer and global supplier of high-grade iron-ore pellets.
According to the partnership, Bahrain Steel would provide Essar Group with 4 million tonnes of DR-grade pellets annually (mtpa).
All integrated steel producers in the area receive their high-quality DR-grade pellets from Bahrain Steel, the only GCC-owned pellet mill.
On Wednesday in Jubail, Saudi Arabia, the two businesses signed the Letter of Intent (LOI) for the supply arrangement.
Dilip George, Group CEO of Foulath Holding, commented on the collaboration and said the business is honoured to work with the Essar Group to assist its innovative idea to establish the first green steel project in Saudi Arabia, where there is an increasing emphasis on sustainable development.
“Bahrain Steel’s LOI with Essar for the supply of 4 million tonnes 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,” he added.
The integrated steel mill in Ras Al Khair, Saudi Arabia, is expected to cost roughly $4.5 billion to build, according to Naushad Ansari, Country Head for Essar Group in KSA.
“This LOI, post final contracts being agreed and signed, will secure 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,” Ansari said.
The Essar project will also be the first green steel project in the area, with the goal of setting a precedent for CO2 reduction on a worldwide scale.
