Bahrain Steel to supply pellets for Essar’s Saudi green steel project

Bahrain Steel, a subsidiary of Foulath Holding that invests in sustainable firms in the Middle East, has partnered with Indian conglomerate Essar Group to supply iron ore pellets for its Green Steel Arabia project.

The Bahrain-based leading producer of high-grade iron-ore pellets will supply 4 million tonnes (mt) of DR-grade pellets per annum (mtpa) to Essar Group under the deal.

Direct reduced-grade, or DR-grade, pellets are a type of iron ore used to make steel in a way that’s more environmentally friendly, bypassing some traditional, energy-consuming methods such as the blast furnace stage.

Dilip George, group chief executive officer of Foulath Holding, said: “Bahrain Steel’s letter of intent with Essar is a testament to our commitment to meet the growing demand for DR pellets by the steel industry in the Gulf Cooperation Council. 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.”

The letter of intent was signed on Wednesday in Jubail, Saudi Arabia.

Naushad Ansari, country head for Essar Group in Saudi Arabia, said, “Essar is looking at investing $4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia. This letter, 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 from 2027.”

The Essar project is set to 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 mtpa, comprising two modules of 2.5 mtpa each. It will also have 4 mtpa hot strip capacity, as well as 1 mt of cold rolling capacity, along with galvanizing and tin plate lines, a company statement said.

In line with the Kingdom’s ongoing demand for steel products and the targets set by the Vision 2030, the facility will cater to all major steel consuming industries including construction, oil and gas, automotive, packaging and general engineering, the statement added.

Vision 2030 is Saudi Arabia’s ambitious strategic framework aimed at diversifying the country’s economy, reducing dependence on oil, and developing public service sectors such as health, education, infrastructure, and tourism.