Muscat December 4 2022: Jindal Shadeed Group will invest more than $3 billion to set up a green steel plant in Oman that will produce high-strength automotive products for customers in the Middle East, Europe and Japan.
The company has the necessary approvals in place to secure land for a green hydrogen-ready project that can process 5 million tons of steel a year, said Harssha Shetty, chief executive officer of Jindal Shadeed Iron and Steel LLC. The plant in Duqm, Oman is expected to be completed by 2026, he said.
“The company, in due course, will evaluate the optimum mix of debt and equity to maximize shareholder value and minimize cost of capital,” he said in an interview on Saturday.
As more and more consumers commit to net-zero goals, steelmakers globally are investing heavily in decarbonizing their operations. Green hydrogen, produced using water and renewable electricity, is widely predicted to play a crucial role in the decarbonization of heavy industry, and is forecast to grow rapidly this decade.
At the same time, rising energy costs for markets such as Europe have hurt output and sharpened focus on alternative sources for the sector.
“We have secured a long-term natural gas supply agreement with the government of Oman for the energy needs of our integrated steel complex,” Shetty said. Additionally, investment in green hydrogen-ready technologies will enable the company to transition away from fossil fuel-based energy, he added.
About 30%-40% of the production from Jindal Shadeed’s new plant will be consumed within Oman and the Gulf Cooperation Council region, and the remaining will be exported to meet booming green steel demand in the global markets, Shetty said. The plant will cater to auto, wind turbine and consumer goods industries across Europe, Japan and other countries, he said.
Demand for flat steel products in the GCC region is expected to jump to more than 11 million tons by 2030 from about 7.3 tons last year, Shetty said. Jindal Shadeed currently has a steel plant in Oman that produces 2.4 million tons annually.
Jindal Shadeed’s parent, Jindal Steel Group, is part of the $35 billion OP Jindal Group family. That includes Naveen Jindal’s Jindal Steel & Power Ltd. and his brother Sajjan Jindal’s JSW Steel Ltd. The matriarch of the family, Savitri Jindal, is Asia’s richest woman with a fortune of $14 billion, according to the Bloomberg Billionaires Index.