Three Gulf investors have formed a joint venture to build a $400 million steel plant in the southern Oman city of Salalah, a statement by the company said on Tuesday.

Dhofar Steel has been formed by a joint venture of Oman's Salalah Development Company, the Al Suwaidi Group of the UAE and Saudi Arabia's Al Tuwairqi Group to produce 1 million tonnes of steel annually, the statement said.

It said the company would create job opportunities for over 1,000 Omanis, but made no mention of when construction would take place and did not give other details. The Al Tuwairqi Group operates steel product plants in Saudi Arabia.

The venture will be Oman's second steel company, after a pelletising plant operated by Brazil's Vale in the northern industrial city of Sohar.

Demand for steel in Oman is growing for oil industry and infrastructure projects. The country currently produces an average 902,000 barrels per day of oil; its oil and gas minister said last year that it was aiming for production of 1 million bpd in the next three years.

Oman plans to build a 1,000 km (625 mile) railway at an estimated cost of around 5 billion rials ($13 billion), with completion in 2018. – Reuters