Bahrain Steel to supply iron ore pellets to Essar’s green steel project in Saudi Arabia

Mumbai: Bahrain Steel, producer and global supplier of high-grade iron ore pellets, on Thursday said that it has signed a Letter of Intent (LoI) with Essar Group to supply 4 million tonne of DR-grade pellets per annum (mtpa) to Green Steel Arabia (GSA) project in Saudi Arabia.

“Essar is looking at investing about $4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia,” said Naushad Ansari, country kead 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 from the year 2027,” he said.

“Bahrain Steel is the only GCC-owned pellet producer and leading supplier of high-quality DR grade pellets to all integrated steel producers in the region,” a press release said.

“Bahrain Steel's LoI with Essar for the supply of 4 million tonne 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. 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, ” said Dilip George, Group CEO of Foulath Holding.

The Essar initiative aims to become the region's pioneer in eco-friendly steel production, setting a global standard for carbon reduction. The project is designed with a direct reduced iron (DRI) capacity of 5.0 million tonns per annum, comprising two modules of 2.50 million tonne each, accompanied by a hot strip capacity of 4.0 million tonne per annum.

Additionally, the project includes 1.0 million tonne of cold rolling capacity alongside galvanizing and tin plate lines. In alignment with the Kingdom's Vision 2030 objectives and its persistent demand for steel products, the facility will cater to key industries such as construction, oil & gas, automotive, packaging, and general engineering.