VAI won the contract to build the DRI plant against competition from Germany's Ferrostaal. It will use DRI technology from the US' Midrex. The DRI plant will use natural gas and dressed iron ore feedstock to produce metallised iron, which will then be processed in the steel plant, to be built by VAI in partnership with Germany's Siemens. Italy's Danieli & Companywas the only other bidder for the steel plant package.

In April, a team of VAI and Germany's SMS Demagwas selected to expand the flat product unit's hot strip mill to 2 million t/y from 800,000 t/y. A team of US-based Danieli Morgardshammarand Dywidag Saudi Arabiain May won the contract to build a new steel reinforcement bar and wire rod mill for Hadeed's long product's facility.

ANZ Investment Bankhas been appointed financial adviser on the expansion project and Norton Roseis legal adviser on a funding package likely to be worth $400 million-500 million. The facility will be completely covered by Germany's Hermes, Austria's OeKB and Italy's SACE.

The project is part of a larger scheme aimed at doubling Hadeed's flat products capacity to more than 2 million t/y and raising its long products capacity to 3 million t/y from 2.5 million t/y. Several other awards are awaited on the expansion programme, including the contract to install a paint coating line with capacity to handle 150,000 t/y of flat products (MEED 11:6:04).