The contracts to carry out the construction of the $750m Hidd Steel Mill in Bahrain are expected to be formally signed by mid-March.

The preferred bidders for the two engineering, procurement and construction contracts were announced in December 2009.

Japan’s Kobe Steel and the US-based Midrex are due to sign the contract to provide the engineering, procurement and construction (EPC) services for the direct reduction iron (DRI) plant. Germany’s SMS Demag will sign a similar deal for the plant’s meltshop and rolling mill.

The companies are all expected to start work soon after signing the contracts.

“We are confident the EPC draft contracts will be signed within the next two weeks and work will commence shortly after that,” says Anurag Bisaria, director for metals at Kuwait’s Gulf Investment Corporation, one of the main backers of the scheme.

The construction of the plant is expected to take up to two years to complete,. The first commercial output is expected by mid-2012. When completed, the mill will have capacity to produce up to 1.5 million tonnes a year of steel (MEED 18:5:09).

The Hidd Steel Mill is a joint venture between the Kuwait-based Foulath, which holds 51 per cent. Japan’s Yamato Kogyo holds 49 per cent.

Kuwait’s Gulf Investment Corporation (GIC) owns 50 per cent of Foulath. Meanwhile 25 per cent is owned by by Qatar Steel, 10 per cent each by the Kharafi Group of Kuwait and the National Industries Group of Kuwait, and 5 per cent by the Kuwait Foundry Company.

The Hidd area is on Muharraq Island, to the northeast of the capital Manama. It is also the site of the Khalifa Bin Salman port, which opened in 2009and is run by APM Terminals of the Netherlands.