The Middle East’s only iron ore pelletising plant is making preparations to more than double its current capacity in line with expansion plans announced by regional steel producers and growing international demand.

Gulf Industrial Investment Company (GIIC) of Bahrain has embarked on a two-pronged expansion through debottlenecking and the construction of a new $300-million plant to take total capacity to 9.1 million tonnes per year (tpy) from 4 million tpy now.
Its general manager for commercial and administrative affairs, Marcos Celano, said the debottlenecking or in-plant enhancement, would raise capacity to 4.6 million tpy by the beginning of 2006, while the new plant, GIIC’s second, would have a capacity of 4.5 million tpy when completed in early 2008.   
The in-plant enhancement process is underway with contracts signed with equipment suppliers.
 “A key equipment is a mill for grinding some 1.5 million tonnes of pellet feed per year which we are purchasing from Polysius of Germany. Integrated with that is a balling disc that the company is acquiring from Brazil,” said Celano.  Balling technology is well developed in Brazil where nine pelletising plants are in operation. GIIC expects to have in place all the equipment by end-2005.  
About the new plant, Celano said site digging would begin in mid-2005. “We’ve started economic and technical feasibility studies. The concern over gas availability has been dispelled with the Bahraini government confirming it will supply us our requirements for the plant.”
The new plant will entail the installation of a 27 MW gas turbine to join three existing turbines of the same capacity.
GIIC is equally owned by Gulf Investment Corporation and Itabira Rio Doce Company  (Itaco), a wholly owned subsidiary of Brazil’s Companhia Vale do Rio Doce (CVRD). It manufactures pellets suitable for use in Direct Reduction (DR) and Blast Furnace (BF) plants and exports to the Gulf, India, Iran and Southeast Asia.
The company brings 90 per cent of its pellet feed from Brazil and the remainder from Iran. Its processes use limestone from Bahrain while bentonite, the binding material, is imported from India.
Sales of GIIC pellets to the Gulf in 2004 were around 1.6 million tonnes with Qatar Steel Company (Qasco) and Hadeed of Saudi Arabia each taking 800,000 tonnes. Celano said the intention for 2005 was to sell 2 million tonnes to the region with some 800,000 tonnes going to Qasco and 1.2 million tonnes to Hadeed.
Qasco expects to produce 1.5 million tonnes of steel by 2005-2006 and is expanding capacity with new projects including a new 1.2 million tpy direct reduction plant, a 400,000 tpy rod mill and a 500,000 tpy expansion of the existing meltshop.
GIIC meets roughly 60 per cent of Qasco’s pellet requirements and has signed a five-year contract, beginning 2004, to support its expansion. The Bahrain company has also signed an MoU to supply the Qatari steel maker until 2013.  Qasco also imports pellets from the Swedish company Luossavaara-Kiirunavaara AB (LKAB).
Currently Hadeed has a capacity of 3.9 million tpy of long and flat steel products. Upon completion of an expansion programme in 2006, annual production will rise to 5.5 million tonnes of long and flat steel products.
“Our aim is to increase our market share of Hadeed’s requirements from approximately 15 per cent to 26 per cent next year,” said Celano.
Another major importer of GIIC pellets is India, which took 2.5 million tonnes in 2004. With increased supplies intended for the Gulf, exports to India will be curtailed. “We expect to sell around 1.3 million tonnes in 2005; we need to support our neighbours,” said Celano.
The company expects to export the same quantity to Southeast Asia in 2005 as it did in 2004, about 650,000 tonnes.  Shipments totalling 250,000 tonnes went to Iran in 2004, but indications are that sales for 2005 will be kept open.
Celano said Iran produced its own pellets but still imported from GIIC “because ours are benchmark pellets and they get more productivity from them.”
Itaco acquired its stake in 2000 and introduced Brazilian production and marketing expertise. “Earlier GIIC used to sell a lot in the spot market. Now we go in for long-term contracts and commitments. We aim not only to sell pellets but also to give our customers services such as logistics and information,” remarked Celano.
The Bahrain pelletising plant is considered unique in the world, being the only ‘merchant’ plant that is neither part of an iron ore mining operation nor a steel producing industry. Worldwide there are pelletising plants in Brazil, Chile, Canada, Sweden, Iran, and India.
GIIC pellets are produced in an Allis-Chalmers grate/kiln/cooler plant that has facilities to dry, grind and blend different types of iron ore. The waste heat from the power plant is used for drying iron ore before grinding and for generating steam for the desalination plant. GIIC has a dedicated jetty. Cape-size vessels of 170,000 dwt are first lightened 40 miles offshore through a specialised transfer vessel before they can achieve the permissible draft for berthing at the jetty.
GIIC produces DR pellets suitable for both Midrex and HYL processes. Midrex, the most common direct reduction process, uses a vertical shaft furnace with lump ore and/or pellets as feed. This process amounts to two-thirds of world DRI production.
Steel plants use direct reduction processes if they have cheap and readily available natural gas or non-coking coal and if there is access to iron ore or pellet sources. The Middle East, which has inexpensive energy reserves, has seen a tremendous growth in DR plants.
“GIIC’s grate-kiln process provides the ideal operational conditions for improving the physical and metallurgical properties of the pellets with lower fines generation,” the company said.
“The three biggest steel technology licencees in the world, namely Midrex, HYL and Corex Voest Alpine, have certified and confirmed the high quality of pellets produced by GIIC and its suitability for DR operations.”
In remarks about GIIC quality that the company published, Midrex (USA) was quoted as saying: “GIIC pellets with relatively low gangue, phosphorous and sulphur make them attractive to steel makers.”  HYL-Mexico commented: “GIIC pellets could be considered as a very good raw material for the direct reduction process since their physical and metallurgical properties meet the HYL recommendations.” Voest Alpine Industries remarked that “GIIC pellets are suitable for use in the Corex reduction shaft according to Voest Alpine Industries specifications.”