Hormozgan awards second steel package

11 November 2002

The local Hormozgan Steel Complex (HSC)has awarded the second package on its integrated steel project to a German/Italian/local consortium. HSC awarded the first package on the project covering the construction of a direct reduction iron (DRI) facility in September (MEED 6:9:02).

The consortium of Germany's SMS Demagwith Iran International Engineering Company (IRITEC)and its Italy-registered subsidiary Irascowas selected for the second package, which calls for the construction of a 1.5 million-tonne-a-year (t/y) slab and lime-calcining plant. Sources close to the project say the contract is worth between $330 million-345 million, pending final arrangements now being discussed. The contract is set to be signed before the end of November.

The other bidders were Italy's Danieli & Companywith the local Namvaran, and Argentina's Techintwith the local Industrial Development & Renovation Organisationand an unidentified Japanese firm.

Germany-registered Mines & Metals Engineering (MME)in September was awarded the first package, comprising the construction of a 1.65 million-t/y DRI facility. This contract is worth $140 million.

It is understood that a consortium led by the Belgium arm of Fortis Bankis holding talks with state-owned National Iranian Steel Company (Nisco)on providing financing for both packages.

Industry sources say different financial arrangements are under consideration, including a buy-back option and a combination of commercial loans, export credits and funding from Iranian government sources.

The integrated steel venture will be located in the mines and metals special economic zone in Bandar Abbas.

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