Italy’s Danieli & Company, with the local Industrial Development & Renovation Organisation (IDRO), has submitted the most competitive offer for the project, which covers the construction of a 4 million-tonne-a-year (t/y) pelletising plant. The team is followed by Japan’s Kobe Steel, with a local firm identified as IPT. A consortium led by Germany’s Lurgi, including a division of the European ABB, Spain’s Taimand a local firm, placed the third highest price. The highest offer came from Austria’s Voest Alpine Industrieanlagenbau (VAI), with three local firms. Three other bidders, two local firms and a Chinese/local team, have dropped out of the race.

No price details have been revealed but it is understood that Nisco has budgeted about Eur 140 million ($150 million) for the plant. Industry sources say Nisco favours the Lurgi proposal offering its own technology despite a significant price gap to the Danieli/IDRO bid. The only other offer based on Lurgi technology came from VAI, which priced slightly above Lurgi. Kobe has proposed to use its own technology, while Danieli/IDRO are understood to consider their own or Russian technology. A contract award is expected by the end of the Iranian year on 20 March.

The successful bidder will have to provide its own financing scheme on an export credit agency (ECA) basis. The project’s 51 per cent local content is expected to be raised from domestic sources.

The plant will be operated by Nisco subsidiary Gol-e Gohar Iron Ore Company, the operator of the country’s biggest iron ore mine. Nisco decided to retender the project in 2002 after the Industries & Mines Ministry announced new guidelines for international tenders, introducing at least 51 per cent local content and assigning to local contractors the leading role in local/international partnerships.