A $400 million steel plant project originally planned to be set up in Sur in Oman, may be shifted to Duqm in case the government doesn’t provide the promoters permission for mid-sea unloading of imported scrap, a report said.

The proposed 2.5-million-tonnes per annum steel plant needs a good port facility to import 2.5 million tonnes of scrap metals, mainly from Europe, as its major raw material for producing 2.5 million tonnes of liquid steel, used for making special steel and re-bars, said a report in the Times of Oman.

The company plans to use DRI and scrap metals to a certain proportion for making liquid steel, it added.

"But as for scrap, we do not know whether we will receive permission for doing so mid-sea," said P T Sivarajan, director of operations at Sun Metals, which is developing the project.

"We will be able to take a decision only when we come to know about it. If we don't get permission, we will have to shift the project to Duqm due to good port facility and all other infrastructure,” he said.

“Sur does not have enough space for building a jetty facility, we have conducted some study on that as well," added Sivarajan.  

Sivarajan also informed that the promoters have already signed a contract with Posco Engineering and Construction, Korea, for Pepcom (planning, engineering, procurement, construction, operation and maintenance) services.

Another agreement was signed with Sojitz Corporation, Japan, for support of in-take, off-take and co-development. "They are doing our market analysis." Yet another agreement for power purchase was also signed. A feasibility study was also completed by the company in-house.

The construction work will start only after finalising the location. A decision on best location will be taken by the end of the month, he added.