India: Essar planning HR mill, DRI, EAF facilities in Saudi

The Essar Group, which sold off its steel business in India owing to excessive debt, is now attempting to "revive" its business in Saudi Arabia.

Although the feasibility of the project is unclear, a direct reduced iron (DRI) plant with an annual production capacity of 2.5 million tonnes (mn t) and an electric furnace are planned for the upstream process, and a hot-rolled mill with an annual production capacity of 3 mn t is planned for the downstream process.

In September, Saudi Aramco and Baoshan Iron and Steel, a subsidiary of China's Baowu Iron and Steel Group, announced a plan to build a new thick plate mill.

Transfer of assets

Essar's steel operations, including the Hazira steel plant and iron ore mines, were seized by creditors under the Bankruptcy and Insolvency Code enacted by the Indian government, and assets were transferred to AM/NS India, a joint venture between ArcelorMittal and Nippon Steel.

The Essar Group, led by the Ruia family, still has a presence in the Middle East, UAE and USA.

Way ahead

In the UAE, Emirates Steel is aiming to set up an HRC mill. It is expected that if Essar starts production of HRCs in Saudi Arabia as well, the supply and demand for steel sheets in the Middle East market, which is highly dependent on imports, may change drastically.