Terrorist attack could force delays at $3.2bn Algerian steel project

30 January 2013

Qatar-backed project might have to delay releasing tender due to concerns over security after In Amenas siege

A $3.2bn integrated steel, mining and power project planned for Algeria could be delayed due to the recent terrorist attacks in the North African state.

Sources close to the scheme have said that since the attack by Islamist terrorists on the In Amenas gas facility in mid-January, meetings with stakeholders have been cancelled and the tender release date is now expected to be pushed back.

“Everyone was working towards a February release for the tender for this project,” says a steel industry source based in the Middle East. “Now no one is expecting it to move until the end of the first quarter at the earliest. You can’t blame anyone, everything needs to be done to ensure that the plant can be built safely.”

The complex has been planned for construction in two phases and will be located at the Bellara Industrial Zone, about 40 kilometres from the port of Jijel in the east of the country. Qatar Steel is a subsidiary of Industries Qatar and together they hold a 49 per cent stake of Qatar Steel International, with the majority stake held by the Algerian government.

The scope of works for the complex includes the construction of a direct reduced iron (DRI) plant, a melt shop and a long and flat rolling mill.

Industries Qatar has already made an investment of more than $400m in the project and through its Qatar Steel International subsidiary is exploring the possibility of sourcing iron ore from mines close to the Algeria/Mauritania border.

Concerns regarding security issues could stem from the large distance between the planned location of the plant in Jijel and the mining operations.

Algeria’s iron ore industry is currently dominated by Luxembourg’s ArcelorMittal, which produces about 1.7 million tonnes a year (t/y) at its Ouenza and Boukhadra mines in the northwest of the country.

ArcelorMittal, the world’s largest steel company, was planning to build a similar 5 million t/y steel project in Jijel, but shelved the scheme in June 2010.

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