The Bahrain-based United Steel Holding Company (Foulath) is planning to build a new steel mini-mill at its complex located at Hidd in the kingdom.

The mill will be located next to the $1.2bn Hidd Steel Mill that is being constructed by the United Steel Company (Sulb), a joint venture between Foulath and Japan’s Yamato Kogyo Company.

“The joint venture [with Yamato Kogyo] is working well for Foulath and the construction phase has been on time and on budget,” says a steel source based in the Middle East. “Foulath has an integrated value chain in Bahrain, which gives them options and building another mill adds to those options.”

The scope of the new plant includes the construction of a 750,000 tonnes-a-year steel shop with a 600,000-t/y long rolling mill. The exact budget of the scheme is not known, but is expected to run into several hundred million dollars.

The project is still in the planning stages and the tenders are not expected to be released until late 2012. Sources say the execution strategy is expected to be the same as the Hidd Steel Mill project, which was lump-sum turnkey with technology providers teaming up with engineering, procurement and construction (EPC) contractors.   

Sulb expects to complete the Hidd Steel Mill in 2012 and start full operations in 2013. The plant is much larger in scale than the new facility being planned by Foulath with 1.5 million-t/y of direct reduced iron (DRI) and a 1 million-t/y melt shop and heavy section mill.

Both plants will form part of a large steel complex in Bahrain which includes a 6 million t/y pelletising plant and a stainless steel mill. In 2011, Sulb also completed the acquisition of a 450,000 tonne-a-year rolling mill located at Jubail in Saudi Arabia that will be supplied with billets from the plant at HIdd.

Foulath is planning to become the first ‘mine to metal’ steel company in the Middle East and is looking for further investments in mining and other downstream sectors of the steel value chain.

A company representative was unavailable for comment when contacted by MEED.