A 2.5 million tonne per annum-steel plant is expected to start operation by early 2018 in Sur, said P T Sivarajan, director of operations at Sun Metals, which is developing the project.
"If everything goes well, the plant will be operational in the first quarter of 2018," he told Al Shabiba, the sister Arabic daily of Times of Oman.
"In the absence of a port to handle a 2.5 million tonnes steel plant in Sur, a proSper logistic study is to be carried out to make a decision on site location," noted Sivaraj.
Favourable site
The company has done a lot of work in Sur and it is the favourable site for the project. However, the company will be forced to move to Duqm if mid-sea discharging is not considered.
The plant will produce TMT bars, which are used in construction industry, and also value added special quality round bars for engineering and automobile applications.
The proposed products include 1.2 million tonnes of commercial grade rebar for catering to Mena region in general and Oman in particular.
In fact, 1.133 million tonnes of specialty steel for automobile industry in Mena region in particular and in European and global market.
The Sur project will be the first special steel and TMT rebar production facility in the entire Middle East region, according to the promoters.
Lowest capital expenditure
The pre-engineering cost of the project is estimated in the region of $400-450 million and it has the lowest capital expenditure per tonne of finished product in the region. The project does not have to pay taxes and duties in Oman.
For this type of volume, a jetty and mid-sea unloading practice has to be adopted, similar to Dolvi Steel Plant of Jindal. An additional capital expenditure of $20 million will be needed for the company, if Public Establishment for Industrial Estates (PEIE) does not set up a jetty at Sur. This additional $20 million will be taken care in contingency provided in the capital expenditure.
As far as the present status of the project is concerned, the promoters have already signed contract with POSCO E&C, Korea, for PEPCOM (planning, engineering, procurement, construction, operation and maintenance) services. Also, another agreement signed with Sojitz Corporation, Japan, for support of in-take, off-take and co-development. A feasibility study was also completed by the company in house.
Source: the Times of Oman
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