South Korea’s STX Heavy Industries (STX) is to concentrate on the greenfield portion of the $3bn steel mill in Basra and an unknown Turkish contractor will carry out the rehabilitation of the current facilities.

A source says that Iraq project, which is the largest steel project to be awarded in the world this year, has been split into two separate packages.   

“The whole of the $3bn project was originally given to STX and this included building a power plant and infrastructure as well the steel plant,” the source says. “Now the strategy has changed and there is talk of a Turkish engineering company coming on board to carry out the rehabilitation with STX concentrating on the greenfield package.”

Due to power shortages and outages in the Basra area, a steel mini-mill that contains an electric arc furnace and a caster for long products would require its own independent power supply. Sourcing metal, however, will not be a problem for the potential mill.

“Scrap is not a problem in Iraq,” the source says. “There is plenty of scrap steel that can be utilised by any new steel plant in the country.”

No contracts have yet been signed between Iraq’s Industry and Minerals Ministry and STX or any other contractor and discussions are still being held.

STX does not have its own technology and STX has not signed a deal for technology with any provider as yet.

A South Korean source also confirms that STX has changed its focus to concentrate on the power plant and steel shop.

“STX is talking about the greenfield project for steel and power,” the source says. “Power is needed in the Basra area and I think it is the 500MW plant with the steel shop is what STX wants.”

When fully completed, the Basra steel mill will have a capacity of 1.2 million-t/y of iron bars; 600,000-t/y of section steel; 1.2 million-t/y of hot-rolled products and a 500MW power station.

The State Company for Iron & Steel (SCIS) will operate the complex on completion (MEED 15:4:10).