Global mining giant Vale International will supply iron ore to Essar Group's green steel project in Saudi Arabia, the Indian firm said in a statement on Thursday.
Essar had previously inked a pact with Bahrain Steel for supply of DR-grade pellets for the project.
With signing of the pact with Vale, Essar has secured 100 per cent raw material supply for Saudi steel plant, the company said in a statement.
"Vale International, a wholly-owned subsidiary of Vale SA, a global mining company and a leading producer of Brazilian iron ore and iron ore agglomerates, has entered into a partnership with the multinational conglomerate Essar Group," it said.
Advertisement
Vale, it said, will supply Essar Group with 4 million tonne per annum of iron ore agglomerates (DR grade pellets and briquettes).
Operating from facilities in Brazil and Oman, Vale is a leading provider of high-quality raw materials to integrated steel producers worldwide.
Essar is looking at investing about USD 4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia.
The project is designed with a direct reduced iron (DRI) capacity of 5 million tonne per annum, comprising two modules of 2.5 million tonne each accompanied by a hot strip capacity of 4 million tonne per annum.
Advertisement
Additionally, the project includes 1 million tonne of cold rolling capacity alongside galvanizing and tin plate lines.
Commenting on the occasion, Vale's regional director Andre Figueiredo said: "Vale International's LoI with Essar for the annual supply of 4 million tonne of high-grade iron ore agglomerated products signifies our long-term commitment to meet the growing demand for raw material by the steel industry; especially in the Middle East."
"Vale's portfolio of high grade iron ore agglomerates will have direct positive impact in terms of added value, price competitively and potential lower Carbon footprint; thus fostering the expansion of the low CO2 emission steel industry."
Naushad Ansari, Country Head for Essar Group in Saudi Arabia, commented: "Essar is looking at investing about USD 4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia. Through this LoI with Vale, and the previous LoI with Bahrain Steel, we will have secured 100 per cent of the raw material supply of iron ore feed for the Saudi Steel Plant. Our plan is to start production in the year 2027, and are confident of replacing the flat steel imports into Saudi Arabia and the GCC region with our bouquet of products."
The Essar project aims to be the first Green Steel initiative in the region, aspiring to set a global benchmark for reducing CO2 emissions. Aligned with Saudi Arabia's growing demand for steel goods and the objectives outlined in Vision 2030, the facility will serve various vital steel-consuming sectors, encompassing construction, oil and gas, automotive, packaging, and general engineering.
Just one email a week