Kobe Steel to supply DR plant to QASCO

Kobe Steel, Ltd. has announced that it has been awarded a contract to supply a MIDREX Direct Reduction Plant with an annual capacity of 1.5 million metric tons to Qatar Steel Company (Q.S.C.) (or QASCO). A signing ceremony was held today in Doha, Qatar.

Plans call for the $267.4-million full turnkey project to be completed within 30 months. Kobe Steel will be responsible for the design, equipment supply and construction of the facility. The new plant, to be constructed in Mesaieed, will boost production capacity of direct reduced iron (DRI) from 780,000 metric tons to 2.3 million metric tons per year.

This order represents the 54th plant that will use the MIDREX Direct Reduction Process. In this process, iron ore pellets are "reduced" to increase their iron ore content to over 80%. DRI is often used as a supplement or substitute to high-quality scrap in electric steelmaking. Developed by Midrex Technologies, Inc., a Kobe Steel Group company, the MIDREX Process is used to produce over two-thirds of the world's DRI.

Formed in 1974, QASCO originally started out as a joint venture between the Qatari government, Kobe Steel, and Tokyo Boeki, Ltd. As well as holding equity in QASCO, Kobe Steel was awarded the contract to build the steelworks. Utilizing export financing through the former Export-Import Bank of Japan (currently the Japan Bank for International Cooperation), QASCO became the first integrated steelworks on the Arabian Peninsula when production began in 1978. For over 20 years, Kobe Steel supported QASCO in the management, operation and maintenance of its steelworks. In 1997, Kobe Steel and Tokyo Boeki transferred their equity shares in QASCO back to Qatar.

The facilities at QASCO consist of a MIDREX Direct Reduction Plant, which uses the plentiful supply of natural gas in Qatar to make DRI; electric arc furnaces; continuous casters and bar rolling mills. Current DRI production capacity, which has nearly doubled from the original capacity of 400,000 metric tons a year, is used to make 700,000 metric tons of steel bars and 300,000 metric tons of billets. Today, QASCO has grown into one of the leading steelmakers in the Middle East.

The sharp rise in energy demand from Asia is increasing oil and gas revenue in the Gulf countries, which are using the income to build up their industries and invest in infrastructure. As a result, steel is in short supply on the Arabian Peninsula.



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