GIC goes it alone on pelletising plant

01 February 2006

Gulf Investment Corporation (GIC) is to build a 6 million-tonne-a-year iron pelletising plant at Hidd, following the decision by Gulf Industrial Investment Corporation (GIIC) to cancel the expansion of its nearby pelletising plant. Total project costs are estimated at about $350 million.

GIC is a 50 per cent shareholder in GIIC but the Brazilian partner Companhia Vale do Rio Doce is understood to have been unenthusiastic about the project. At present GIC is the sole shareholder in the new project company, called Foulah, for the greenfield plant, but the company is talking to a wide range of international and regional investors about taking stakes. GIC is also developing the nearby United Stainless Steel Company (Usco) project, and the two plants will share infrastructure such as utilities and jetties.

Technical bids have been submitted for the engineering, procurement and construction (EPC) contract on the main pelletising plant. Japan's Kobe Steel, Italy's Danieli & Company and Germany's Siemens are competing for the job. A selection is imminent for the contract to carry out bid evaluation, following the submission of bids by Atkins and McLellan & Partners, both of the UK. Arab Banking Corporation is acting as financial adviser, as it is on the Usco project. GIC is looking at a debt/equity split of about 60:40.

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