The $1.2bn Hidd Steel Mill project in Bahrain is still expected to break ground in July despite the Muharraq Municipal Council not awarding the facility a building permit on environmental grounds.

The municipal council blocked the permit due to an issue regarding the joint venture partners conducting their own environmental study for the 4 million tonnes-a-year facility and voiced concerns that an independent study was not carried out.

Sources close to the project, however, say that while the concerns of the local council are being taken seriously and solutions are being sought, the project still plans to meet its construction milestones and is still due to be completed in the second quarter of 2012.

“The council has got every right to be concerned about the environment, we all are, but I am sure the partners involved can resolve the issue,” a senior source close to the project says. “Everyone involved [in the project] is fully committed to ensuring stringent environmental regulations are enforced.”

The source adds that the two technology providers involved in the project Japan’s Kobe Steel and Germany’s SMS Group will write letters to the Bahrain authorities guaranteeing that the plant’s machinery will meet international standards on emissions.

“Every company involved at Hidd wants to resolve this issue both amicably and quickly,” another source says. “Clashing with the local municipality before the project even breaks ground is not going to do anyone any good.”  

The Hidd Steel Mill is being constructed by United Steel Company (Sulb) a joint venture comprising of the Bahrain-based United Steel Holding Company (Foulath) and Japan’s Yamato Kogyo Company.

In March the partners awarded the construction packages for the facility to two joint ventures comprising of Kobe Steel alongside the US’ Midrex and Switzerland’s SMS Comcast and Germany’s SMS Meer alongside South Korea’s Samsung Engineering (MEED 31:3:10).