France’s Lafarge Ciments and the UK’s Merchant Bridge are set to sign the contract with the Iraq government for the rehabilitation of the Karbala cement plant at the end of April and release tenders for the engineering, procurement and construction (EPC) contracts shortly after, a source tells MEED.

The source says that on completion in the fourth quarter of 2012, the rehabilitated plant will have cost between $150m to $200m and have a capacity of 1.8 million tonnes-a-year.

“The official signing was due to take place in Baghdad in mid-April, but was delayed due to the Icelandic volcano ash grounding flights,” the source says. “Lafarge is in charge of awarding the EPC contracts and will be going to the market for subcontractors shortly after the signing ceremony takes place.”

“Lafarge usually work with a number of pre-qualified subcontractors and I expect they will be interested in companies who have Siemens [cement technology providers] experience. However, the decision on awarding the contracts will be a team decision involving both Lafarge and Merchant Bridge.”

The two companies have formed a joint venture to co-own the facility, but the source adds that the final percentage shareholding each company will take has yet to be decided.

Lafarge and Merchant Bridge were also awarded a $300m greenfield licence for the Karbala site by the Iraq authorities, but it is only the licence for the rehabilitation of the current facility that is currently ongoing.  

Lafarge is the world’s largest cement manufacturer and Merchant Bridge is a London-based direct investment firm that is backed by a number of merchant families from the GCC area.

The plant is located 90km east of Karbala, 240km from the border with Saudi Arabia.