Qatar Steel exploring locations and projects: official

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31 Aug 2008

Qatar Steel is looking at “alternate locations and projects” for investments and securing raw materials it required, Industries Qatar chief co-ordinator Mohamed al-Sherawi has said. “We pick projects only after careful evaluation. We know there are projects which give us better yields. “So, we will continuously pursue for good opportunities abroad,” he said when sought comments on the Qatar Steel decision to pull out of the $2.5bn Mauritanian iron ore project.
He said the decision not to proceed with the Mauritanian venture was taken after “careful evaluation”, al-Sherawi said.
“When we made initial discussions about the Guelb el Alouj iron ore project in Mauritania, it looked attractive.
“We thought we will get good returns. The situation has now changed. The project no longer looks attractive,” he told Gulf Times here yesterday.
Qatar Steel, an Industries Qatar (IQ) subsidiary, recently parted ways with Australia-based Sphere Investments and its project partner Societe Nationale Industrielle et Miniere (Snim) on the development of the $2.5bn Mauritanian iron ore project.
The Mauritanian project is expected to start by 2010 with an annual direct reduction pellet production of 7mn tonnes (from one deposit at Guelb el Aouj East) for more than 30 years with a total of five deposits in the project area.
Recent reports said Qatar Steel is the second Gulf company after Saudi petrochemicals giant Saudi Basic Industries Corporation (Sabic) to have quit the Mauritanian project, whose definitive feasibility study (DFS) showed that the discounted cash flow modelling yielded a project internal rate of return of 15.1% after taxes.

Source: Gulftimes