Rising international demand has prompted a Bahrain firm manufacturing iron ore pellets to plan two similar ventures in the Arab region and diversify into steel production at a domestic site.

Gulf Industrial Investment Company (GIIC) operates the Middle East’s only iron ore pelletisation plant in Hidd and is awaiting the completion of its second plant at the same site.
The company said both of the planned pelletisation plants in the region would have an annual capacity of six million tonnes.
Bids have been received for the EPC contract to build a new direct reduced iron (DRI)-fed sections mini-mill next to the GIIC site.
Owning the project are United Steel Co-Foulad (51 per cent) and the Japanese joint venture partner, Yamato Steel Co (49 per cent).  United Steel has the same ownership structure as GIIC whose shareholding comprises Kuwait-based GIC (50 per cent), Qatar Steel (25 per cent), MA Al-Khorafy and Sons Co, Kuwait (10 per cent), Kuwait National Industries Group (10 per cent) and Kuwait Foundry (5 per cent).
Contracts will be signed by early April, GIIC vice-chairman and managing director Khalid Al Qadeeri was quoted in press reports as saying. Commissioning is scheduled for the third or fourth quarter of 2010. Production facilities include a 1.5 million tonnes per year (tpy) DRI plant, a 1.3 million tpy meltshop and two rolling mills.
The official said the joint venture would have a similar configuration to Yamato sections plants in Japan, the USA and Thailand.
He said GIIC had received a gas supply commitment from the Bahrain government recently as well as approval for the total power requirement of 350 MW.
GIIC recently enhanced its own capacity in Bahrain through debottlenecking. Production has gone up to five million tonnes per year. Its second plant is designed for an annual capacity of six million tonnes and will be completed in July 2009.
Kobe Steel is responsible for the design, construction and start-up of the plant. The contract worth $570 million includes expanding the captive jetty and stockyards for raw materials and pellets and installing state-of-the-art material-handling equipment.
GIIC sales in 2007 were expected to be higher than $300 million and expectations for 2008 were that it would surpass that figure by 60 per cent.
The pellets manufactured by GIIC are used in the direct reduction process of both Midrex and HyL technologies as well as in Blast Furnace (BF) plants.
The company is located close to DR pellet markets in the Gulf, India and Southeast Asia. It describes itself as a unique “merchant plant” as it is currently not directly involved in mining ore or in producing direct reduced iron.
GIIC used to produce very small quantities of BF pellets but with growth in the Chinese market it decided to increase output of those pellets. In 2008 it plans to produce 3.5 million tonnes of DR pellets and around 1 million tonnes of BF pellets.
The company has offtake arrangements with Qatar Steel and Hadeed, the Sabic affiliate.
In 2007 both companies received 800,000 tonnes, but in 2008 Qatar Steel will get 1.5 million tonnes and Hadeed 1.9 million tonnes. One million tonnes will be shipped to India and the Far East including China.
After the new plant is commissioned in 2009, Qatar Steel will receive up to 2.2 million tonnes and Hadeed 1.9 million tonnes. Supplies to Shadeed in Oman will be 600,000 tonnes and those to Emirates Iron and Steel Factory, AbuDhabi, 500,000 tonnes, a quantity likely to go up when Emirates raises production.
GIIC is also committed to supplying DRI Co Ltd of the Al Tuwairqi Group around a million tonnes. There will be agreements with Malaysian and Indonesian steel producers as well.
In the last three years there has been an increase of more than 100 per cent in the prices of iron ore and pellets due to strong demand from China.
In 2007, GIIC imported 90 per cent of its iron ore requirements from Brazil with the remainder coming from Iran, Canada and South Africa. In 2008 and 2009, Brazil will supply 95 per cent of the requirements with South Africa delivering the remainder.
“The challenge is the availability of raw materials and logistics. There’s so much demand there are delays in supplies. Another challenge is to find suitably qualified staff,” the sources said.
The company is striving to achieve high Bahrainisation levels.