Italy’s Danieli Corporation has emerged as the frontrunner for the local Emirates Steel Industries’ (ESI) third phase expansion at its complex at Mussafah in Abu Dhabi.

Steel industry sources say the Italian steel plant manufacturer is the lowest bidder and was the favourite to be awarded the contract, although a spokesman from ESI says that it has not made a decision regarding the winning bidder and would make an announcement in due course.

“[Danieli] must be feeling confident about winning this [project] as it came in with the lowest price and has a good track record of working with ESI,” says a steel source based in the GCC.

Danieli has got its own construction arm and submitted a bid for phase three alone. Germany’s SMS Group partnered the local/UK’s Petrofac Emirates, while Austria’s Siemen’s Steel joined with South Korea’s Hyundai Engineering & Construction. The exact budget of the project is unclear, but similar schemes in the region have cost several hundred million dollars.

“This project has taken a while to come to fruition, but most of the interested parties are expecting a decision to be made by the end of June,” says another steel source.

The scope of works for the phase three will include the construction of a direct reduced iron (DRI) plant, steel melting plant, thin slab caster and a continuous strip rolling mill. Capacity will be 1.4 million tonnes a year (t/y).

The plant will produce hot-rolled coil (HRC) and narrow plate. HRC and narrow plate are used in a wide range of products including steel tubes, staircases and industrial flooring.

Danieli has provided the technology for ESI’s previous two phases and the complex has a DRI capacity of 3.2 million t/y and a steelmaking capacity of 2.8 million t/y. ESI is owned by Abu Dhabi’s GHC through Abu Dhabi Basic Industries Corporation (Adbic).