Saturday, June 12, 2010

Egypt gives ArcelorMittal plant build deadline

Egypt's Industrial Development Authority has given ArcelorMittal, the world's largest steelmaker, an August deadline to start building work on a steel plant near the Red Sea or lose its licence, an official said.

ArcelorMittal was granted a licence in 2008 to build a $340 million plant to produce 1.6 million tonnes of steel using DRI technology and another 1.6 million tonnes of billets, but held the project back as a result of the financial crisis.

"We are following regulations that any firm that violates the rules of a licence would have it revoked within the agreed time frame," Amr Assal said on Wednesday, confirming a report carried by the daily al-Mal, which reported the August deadline.

The company would have to show its commitment by starting construction work to retain the licence, Assal said.

The Luxembourg-based company, which has about 8 percent of the global market, has not started building the site, which was meant to start production in 2009.

ArcelorMittal said in an emailed statement Egypt remained an important location for future investment.

"The consumption of steel in Egypt has been impacted by the recent financial crisis. Demand is now recovering and we plan to start discussions with the Egyptian government about the project imminently," the group said.

Steel rebar demand had remained relatively resilient in Egypt because of the need for housing and government infrastructure spending, analysts have said.