Direct reduction upgrade for KSC

31 October 2003
Khouzestan Steel Company (KSC)has issued a tender for a major upgrade of direct reduction iron (DRI) capacity at its Ahwaz plant. The project will involve the expansion of three large Midrex modules and a zam-zam module, as well as the addition of an entirely new zam-zam unit. The bid deadline is 5 January and the consultant is the local Tara Tarh Engineering & Technological Company, a specialist in the steel industry.

The capacity of the three Midrex DRI modules is to be expanded from 550,000 tonnes a year (t/y) to 660,000 t/y. The existing zam-zam unit will be increased from 800,000 t/y to 1 million t/y of sponge iron and a new 1 million-t/y sponge iron gas-based zam-zam unit will also be installed.

The project will be carried out on a buyback basis, with the contractor supplying finance for all project costs, including supply of plant, civil construction and technology. Repayment will be through the sale of KSC products over a nine-year period.

Because the use of private finance is new to KSC, project negotiations are expected to be long and detailed. Only local companies or joint ventures with majority local ownership are eligible to bid. So far, more than 10 companies have purchased tender documents and the consultant says more are expected to do so.

KSC is carrying out a major expansion of all its facilities. It issued in October a tender for the construction of a 350-MW captive power plant on a build-operate-transfer (BOT) basis. The plant will serve the expanded production facilities at Ahwaz. Tara Tarh says KSC will issue a tender by the end of November for the expansion of its steel production facilities to bring total steel nameplate capacity to 3.2 million t/y, from 1.5 million t/y. It will also issue a tender - probably in the first quarter of 2004 - for increased oxygen capacity, also to serve the new facilities (MEED 10:10:03).

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