The Qatar Steel Company has signed a memorandum of understanding with Essar Global Ltd to build a new steel plant with an annual capacity of 4 million tonnes.

The plant will be built at the Mesaieed Industrial City at an estimated cost of $1.25 billion. The MoU was signed by Qasco director and general manager Shaikh Nasser Bin Hamad Al Thani and Ravi Ruia, vice-chairman of Essar, in the presence of the Minister of Finance and chairman of the Qasco board of directors Yousuf Hussain Kamal.
The plant is expected to come online in the first half of 2008, an official release issued by Qasco said.
According to the agreement, Essar will provide high-grade iron ore pellets, the technology for manufacture and professional management to set up and manage the plant.
Essar Constructions Ltd will be the EPC contractor for the project, the Qasco release said.
“Qatar is emerging as a prominent player on the international steel map. The demand for our products is rising at a rapid pace,” said Shaikh Nasser after signing the agreement.
“The expansion plans that we have in place reflect our commitment to satisfying the growing demand for Qasco products in various markets around the world.”
Essar Group has its headquarters in India and has an asset base of over $4.4 billion.
The group has interests in a wide range of sectors including steel, shipping, power, oil, construction and telecommunication.
Earlier this year, Qasco signed an agreement with Kobe Steel Japan to build a new direct reduction plant of capacity 1.5 million tonnes per year (tpy) of iron.
This plant is set to come on line in the first half of 2007, Qasco said, adding it would be able to produce 1.5 million tpy of direct reduction iron (DRI) or 750,000 tpy each of DRI and hot briquetted iron (HBI).  
Qasco, which commenced production in 1978, has facilities primarily consisting of four units, namely Direct Reduction, Electric Arc Furnace, Continuous Casting and Rolling Mill, apart from other auxiliary services. The plant and its offices occupy an area of 707,000 sq m. Adjacent to it is an area of 375,000 sq m reserved for future development and expansion. The present plant produces 1.2 million tpy of molten steel and its rolling mill has a capacity of 740,000 tpy. Its product range includes steel billets, reinforced steel bars and deformed bars.
The Qatari company’s UAE subsidiary Qasco Dubai Steel FZE (QDS) is implementing a capacity hike and is also due to set up a new unit at the Jebel Ali Free Zone. 
QDS is in the process of expanding its production capabilities in the Jebel Ali Free Zone to 250,000 tpy. Morgan USA have been contracted to design and deliver the expansion project.
The Dubai plant makes wire rods, rebars in coil, deformed bars and plain round and square bars. Qasco supports QDS technically and with the supply of raw materials.