Arfa plans new Yazd steel plant

16 January 2006
The local Arfa Iron & Steel Company has issued an engineering, procurement, construction and commissioning (EPCC) tender for a new direct reduction iron (DRI) and steel melting and casting facility in Ardakan, near Yazd. The greenfield project is to be carried out on a finance or buyback basis and is planned to have capacity of 800,000 tonnes a year (t/y). The consultant is the local Foolad Technic International Engineering Company.

The client has set a provisional bid deadline of 6 April, with work set to start in the third quarter. Construction is scheduled to take 36 months. Foolad Technic says the DRI element will be tendered in a separate package from the steel casting and melting units. Arfa Iron & Steel is 49 per cent state owned, which means it qualifies for a low-interest loan from the Oil Stabilisation Fund. However, it has asked contractors and financiers to bring finance options for the entire project (see Tenders).

The plant will use feedstock from the nearby Ardakan pelletising plant, which in turn uses iron ore mined at Chadormaloo, also in Yazd province. About 20-30 per cent of the plant's output is to be exported and the rest will be put on the domestic market. The plant will have ready access to the country's rail network.

Iran plans to increase steel production to 29 million t/y from 7.5 million t/y. Projects on the table include an Iranian-Indian joint venture to build a 2 million-t/y plant, a Khouzestan Steel Company proposal to add 1.7 million t/y at its Ahwaz plant and an Iran National Steel Industries Group (INSIG) project to raise capacity by 800,000 t/y, also in Ahwaz. Ahwaz Steel & Pipe Mill Company also plans to add 800,000 t/y at Khorramshahr, while Mobarakeh Steel Company in Isfahan is preparing tenders for expansions totalling 4 million t/y.

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