Emarat Dzayer Group, a Dubai-based conglomerate whose business interests span oil and gas, transport, agriculture and healthcare has signed an agreement with the Algerian Government-controlled GroupeImetal to create a joint venture to produce steel in the North African country.

The total cost of the project is estimated to be around $1.6bn, local Gulf News cited a statement from the firm as saying. The JV firm, Emarat Dzayer Steel Company, will produce 1.5 million tonnes of directly reduced iron (DRI) a year and 1 million tonnes of steel in the form of rails, steel structures and seamless pipes.

GroupeImetal will hold a total of 51 per cent stake through its two subsidiaries Naftal and Asimdal and the rest will be held by Emarat Dzayer Group.

The group inked the agreement on 23 November on the sidelines of the Algerian-Emirati Investment Forum in the presence of Sheikh Mansour bin Zayed al-Nahyan, UAE’s deputy prime minister and minister for presidential affairs, and Algerian prime minister Abdul Malek Sellal.

The announcement is part of a series of ten agreements between Algerian and UAE firms, both public and private sector organisations.

The Emarat Dzayer Group has also signed a second agreement for oil distribution with Naftal, a state-owned company for oil distribution and Asmidal an Algerian government-controlled manufacturing company for petrochemicals to set up joint venture for manufacturing, blending and packaging facilities of lubricants and industrial lube oils catering auto, aviation, marine and industrial sectors.