Emirates Steel, one of the UAE’s largest non-oil companies, has signed a preliminary agreement with Mauritania’s mining company Société Nationale Industrielle Et Minière (SNIM) to potentially create a joint venture company to produce iron oxide pellets, the primary feedstock required for the production of steel.
The company, part of Abu Dhabi Securities Exchange-listed Arkan Building Materials, said on Tuesday that the agreement is for "18 months", without divulging details.
“Increasing the production of quality metals and materials will support national industries and foster a vibrant export hub that will further strengthen our presence in the 50 countries around the world that import Emirate Steel products,” Saeed Al Remeithi, group chief executive of Arkan and chief executive of Emirates Steel, said.
“By investing in the production of this essential raw material, we are also securing a steady supply of feedstock that will shield us against global raw material market volatility and fuel our ambitious growth plans to expand our product range to include flat steel.”
Established in 1998, Emirates Steel supplies domestic and international markets with high-quality finished products including wire rods, rebars, heavy sections and sheet piles.
“At 1.5 billion tonnes, Mauritania has the largest iron reserves in the Arab world and Africa and we are very keen to establish strategic partnerships that allow us to take advantage of our mineral wealth in the most optimal manner," Mohamed Telmidy, chief executive of SNIM, said.
"Iron pelletising projects in the Middle East and North Africa will accelerate the development of the regional steel industry and enhance its competitiveness regionally and globally."
SNIM is an integrated mining company covering all aspects of mining, from exploration, extraction and processing to the sale of iron ore. The company recorded a turnover of $1.23 billion in 2020 and accounts for 11 per cent of Mauritania’s gross domestic product.
Arkan acquired Emirates Steel from Senaat, which is part of Abu Dhabi's holding company ADQ, last year. Arkan reported a three-fold jump in its revenue to Dh3.02bn in 2021.