JFE Steel Corp., Japan's second largest steel producer, is planning to form a JV company with Bahrain-based steelmaker Foulath for the purpose of processing iron ore pellets in Oman, thus securing raw material supplies for its steelmaking operations.
Under the plans, the new JV is to make an investment worth $700 million in the project, in which JFE Steel will have a 40 percent stake.
The proposed plant is to be built in Salalah, southern Oman, and is expected to be commissioned in 2011.
Foulath is controlled by an investment firm which is backed by six Middle Eastern governments, and it has the technology to produce iron ore pellets out of low-grade iron ore.
The new processing plant will have an annual production capacity of seven million mt, half of which is destined to be supplied to JFE Steel - equal to around ten percent of the steelmaker's total requirement of this raw material.