Essar Group, a prominent Indian conglomerate, is nearing final approvals from Saudi authorities to commence construction on a $4.5 billion low-carbon steel plant in the Kingdom.
This project marks a significant expansion for Essar, representing their first steel venture outside of India.
Anticipated Approvals and Land Allocation
Prashant Ruia, Director of Essar Capital, confirmed that while final approvals are still pending, the company is confident in securing them soon. A dedicated 1,000-acre plot has already been designated for this ambitious project.
Essar anticipates the construction of the steel plant to take approximately three to three-and-a-half years. Once operational, the facility aims to cater to Saudi Arabia’s burgeoning domestic demand for steel, which currently relies heavily on imports.
Saudi Arabia’s Growing Economy and EV Ambitions
The Kingdom of Saudi Arabia is undergoing a period of rapid growth and has set ambitious targets to become a major hub for electric vehicle (EV) manufacturing, aiming to produce more than 300,000 cars annually by 2030. Essar sees this as a significant opportunity to tap into the increasing demand for steel in the automotive and consumer goods industries.
Essar’s Focus on Green Technology
Having become debt-free two years ago through strategic asset sales, Essar is now investing heavily in decarbonization and green mobility projects to fuel its next phase of growth. This commitment to sustainable practices aligns with global trends towards reducing carbon emissions in the steel industry.
Green Steel Production and Dedicated Port Facilities
The proposed steel plant will utilize advanced gas-based direct reduced iron (DRI) and electric arc furnace (EAF) technology, minimizing its carbon footprint and primarily serving the local Saudi Arabian market. Additionally, Essar has plans to invest in two dedicated berths at Ras Al Khair port, exclusively for the steel project’s logistics and transportation needs.