One of the key stages of the Iron Plant Project has been completed (PHOTO)

One of the key milestones of the hot briquetted iron (HBI)
plant project with an annual production capacity of 2 million tons
has been achieved. Azerbaijan Metal Company (AzMC) LLC announced
the successful completion of the bankable feasibility study (BFS)
report and presented its results to the key stakeholders of the
project, advancing into project financing and engineering phases.
It should be noted that AzMC was established last year by Dashkasan
Iron Ore LLC and Kazakhstan’s Fonte GreenMet Investments Fund OEIC
Limited to arrange the funding, design, construction, and operation
of the HBI plant.

At an event held in Baku on June 4, the results of the BFS were
presented and documents outlining the next project phases were
signed. The event was attended by executives and representatives of
AzerGold CJSC, Dashkasan Iron Ore LLC, Kazakhstan’s Fonte GreenMet
Investments Fund OEIC Limited, China’s Sinosteel Equipment &
Engineering Co., Ltd. and Sinosure Export Credit Agency, Italy’s
Tenova and SACE Export Credit Agency, as well as ING Bank from the
Netherlands.

It was noted that the BFS report prepared by Sinosteel Equipment
& Engineering Co., Ltd.under the agreement signed last November in
Beijing confirmed the project's technical and economic feasibility.
According to theaforementioned report, the plant's total capital
expenditure is estimated at USD 800 million.

The plant to be commissioned at the end of 2029 is expected to
contribute approximately USD 1 billion annually to the country’s
GDP and create around 1,600 new direct and indirect jobs. The plant
will be located in the Western Industrial Park in the Shamkir
region. The project will benefit from a range of state-supported
incentives, including tax and customs exemptions, logistics support
measures, and preferential natural gas tariffs, enhancing its
overall competitiveness and investment attractiveness.

The ENERGIRON Zero-Reformer (ZR) technology distinguished by
lower energy consumption and significantly reduced carbon footprint
compared to conventional production methods, will be implemented at
the enterprise.

The completion of BFS has allowed the project to move to the
next phases of development. Thus, as part of the event, a Basic
Engineering agreement was concluded between AzMC and Sinosteel,
thereby documenting the transition to the next stage of the project
implementation. AzMC’s General Manager Jeyhun Aliyev and
Sinosteel’s General Manager Hua Guanglin signed the document. The
next stages will involve the performance of engineering,
procurement, and construction (EPC) operations.

A significant portion of the investment required for the project
is expected to be financed through international credit facilities,
enabling the optimization of AzMC’s capital expenditures. As 50
percent of AzMC’s shares are owned by state, this approach will
also enhance the company’s financial efficiency. For this purpose,
China’s Sinosure and Italy’s SACE have been appointed as Export
Credit Agency (ECA) partners, providing export credit insurance and
guarantee support for the financing, while ING Bank has been
assigned the project’s global coordinator. A member of one of the
world’s largest international financial groups, ING Bank, will
coordinate funding through export credit agencies in cooperation
with AzMC. This arrangement was documented at the event in an
agreement signed by AzMC’s General Manager Jeyhun Aliyev, and ING
Bank’s Head of Metals, Mining, and Fertilizers and Global Steel
Lead, Erik van Doezum.

As it’s known, based on analyses conducted with the involvement
of international consulting companies, a three-stage production
chain has been identified as the most economically and
technologically viable solution for upgrading feedstock from the
Dashkasan iron ore deposit into high-value products. The integrated
chain covers iron ore extraction, production of high-grade
concentrate with an iron content exceeding 67%, pelletizing, and
hot briquetted iron (HBI) production. For the first time in
Azerbaijan, a slurry pipeline will be constructed to transport
high-grade concentrate from the beneficiation plant in the
Dashkasan region to the pellet plant to be established in the
Shamkir region.

The components of the project, comprising ore extraction, the
beneficiation plant, the slurry pipeline, and pellet production,
are planned to be implemented by Dashkasan Iron Ore LLC. The
preparation of a bankable feasibility study is currently underway
with an international consultant involved.

The HBI plant is the largest component of the production chain
in terms of scale, requiring the greatest investment and the
longest implementation period. Therefore, the execution of this
stage has already begun as a strategic priority.

The arrangement of the integrated production chain will
contribute to the development of the construction and
infrastructure sectors, enabling the manufacture of high-quality
iron and steel, which plays a crucial role in strengthening
economic growth and industrial capacity. The project will eliminate
the country’s dependence on imported raw materials for steel
production and make a significant contribution to increasing the
country’s export potential. As a result of the comprehensive
implementation of all phases of the project, it is expected to
contribute approximately USD 19 billion to the country’s GDP, while
the creation of around 4,000 new jobs in the regions will be
ensured through direct and indirect effects.