Qatar Steel has signed a medium-term loan facility of $250 million to help fund the construction of a new state-of-the-art steel melt shop with a 1.1 million tonnes per annum (tpa) production capacity.

The agreement was signed with a syndicate of two banks, namely the International Bank of Qatar (IBQ) and the Union National Bank (UNB).

IBQ, the facility agent, will provide $150 million of the project’s cost with UNB funding he remainder $100 million.

Signing were Ali Bin Hasan Al Muraikhi, Qatar Steel director and general manager, George Nasra, IBQ managing director, and Ala’ Abu Mughli, UNB’s senior vice president and Qatar head.

The new subordinated loan will be utilised by Qatar Steel to construct a state-of-the-art new Steel Melt Shop with a 1.1 million tpa production capacity. Work on this project has already started. The expected launch date is the first quarter 2013, and the targeted markets are local and regional.

Al Muraikhi said the loan facility agreement marked a significant milestone in the expansion plans and aspirations of Qatar Steel, which has a current annual production capacity of 2.4 million tonnes of direct reduced iron (DRI)/hot briquetted iron (HBI), 1.9 million tonnes of molten steel, 1.8 million tonnes of steel reinforcement bars and 300,000  tonnes of wire rod.

 Qatar Steel is a wholly owned subsidiary of Industries Qatar (IQ).