JO Steel Holdings secures $692mn credit to set up steel plant in Saudi Arabia

The steel mill in Jubail will have an annual production capacity of 1.8m tonnes

UK-based steel manufacturing holding company JO Steel Holdings has secured a $692mn credit facility from a consortium of banks and financial institutions led by Saudi British Bank (SABB). The deal will see the development of an integrated billet manufacturing plant in Ras Al-Khair Industrial City in Saudi Arabia.

In a statement, the company said that the proposed steel mill, which will be located north of Jubail on the Kingdom’s east coast, will have an annual production capacity of 1.8m tonnes. The plant is expected to commence commercial production by the first quarter of 2025.

In March 2022, Doosan Heavy Industries and Construction broke ground on a 400,000sqm forging and casting facility in Saudi Arabia.

JO Steel will provide $173mn in equity, to be raised through convertible warrants, the statement added. Each warrant will carry a right exercisable by the holder to subscribe to one equity share against each warrant at a price to be determined at a later stage, to establish the project on an overall debt-to-equity ratio of 80:20, it explained.

Representatives are expected to sign a land lease agreement to that effect with the Royal Commission for Jubail and Yanbu (RCJY) later this month.

The investment is said to be in line with the Saudi government’s National Steel Strategy, which aims to expand Saudi flat steel production according to Saudi Vision 2030.

In August, Johnson Arabia said it had completed works on a calcined petroleum coke plant in Oman and, later in the month, Emirates Steel Arkan said it plans to expand into new Asian and African markets.

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