Government owned Steel Authority of India Ltd (SAIL) has signed a memorandum of understanding with the Oman Oil Co to jointly set up a 3Mt/y steel plant in Oman using gas based DRI technology.

An investment of around US$2.8bn is envisaged with the plant to be operational in about three years time.

SAIL also signed a similar agreement with Indonesia and is seeking joint ventures in South Africa and Mongolia.

The privately owned Indian steel company Jindal Steel & Power already has activities in Oman and recently said it would invest a further US$1bn made up of $400M for the two-phased expansion of its Sohar plant, Oman’s first integrated iron and steel manufacturing facility, which it recently acquired from Abu Dhabi-based Shadeed at a cost of $464M.

Jindal said a steel melting shop with a 2Mt/y capacity will be commissioned by May 2013.

The third phase will include setting up of a 7Mt capacity ore pelletising plant, dependant on the availability of imported ore and natural gas.