Essar Global considering a steel plant in Egypt

Cairo, May 14: Essar Global is consideringbuilding a steel plant in Egypt that entails an investment of $590million, an Egyptian government official said on Monday.

''The group told an Egyptian delegation that visited India earlierthis month that it was seriously interested in establishing a steelplant in Egypt with an estimated investment of $590 million,'' AshrafDiwidar, adviser to the Industrial Development Authority, told Reuters.

''We expect the group to sign an agreement with the Egyptiangovernment soon,'' Diwidar said, but he did not give the capacity ofthe proposed plant.

Essar, with interests from telecomms to construction, last year made an unsuccessful bid for Egypt's Suez Steel.

The group also plans to set up three steel plants elsewhere in theMiddle East, including a joint venture to build a 1.5 million tonnes ayear plant in Iran.

It said last month it planned to buy the privately owned MinnesotaSteel LLC, a U.S.-based company, and invest $1.65 billion to build anintegrated steel plant.

Indian steel companies have been looking overseas to acquire steelplants and raw materials as demand there and in China in particular hasgrown.

TATA STEEL India's largest private steel maker, Tata Steel Ltd, is examining the possibility of building a steel plantin Egypt at an estimated cost of up to $900 million.

''The company has already started discussions with the Egyptian government,'' Diwidar added.

If Tata's plant is established, it would be the company's secondmajor venture in Africa after a ferrochrome unit in Richards Bay inSouth Africa, still under construction.

Egypt, the Arab world's most populous country, went from importing2 million tonnes of steel a year less than 10 years ago to become anexporter of 900,000 tonnes in 2006, the ministry of trade and industrysaid.

The country produced about 4.3 million tonnes of steel in the same year, according to government data.

The International Iron & Steel Institute (IISI) said Egypt's crude steel output stood at 6 million tonnes in 2006.

The IISI has said steel demand in the Middle East is forecast togrow by 9.1 percent this year and a further 8.4 percent in 2008,bringing the region's overall demand in 2008 to 43.6 million tonnes.

Reuters