The first phase of local South Steel Company’s $221m steel plant being constructed at the Jizan Economic City (JEC) in southern Saudi Arabia has finished initial engineering and started civil works on schedule, according to a source close to the project.

Phase one of the facility will involve the construction of a complete mini-mill comprising of a steel plant that will produce 1 million tonnes-a-year (t/y) of steel billets and a connected rolling mill that will produce 500,000-t/y of rebars (reinforced steel bars used in the construction industry). Germany’s SMS Meer and Concast, subsidiaries of the SMS Group are providing the plant.   

“There are no problems with the project,” the source says. “Since building works have started everything has been on schedule and the facility will be completed by the second quarter of 2011.”

The source also says that he is confident that the planned phase II, which will involve the construction of slab making facilities for producing flat products would also go ahead.

 “It is too early to give any exact details, but JEC has indicated that it wants a fully-integrated metals park, so I think it will go ahead,” the source says.

“The most important decision maker on phase II is Qasco [Qatar Steel]. It is a shareholder in the project and it will be trying to optimise its production facilities across the GCC. When Qasco synchronises its operations you will see movement on phase II.”

Qasco owns 20 per cent of the South Steel Company, with Dubai Investment Group owning 10 per cent and the Saudi Pan Kingdom Company for Trading, Industry & Contracting owning the remaining 60 per cent.