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Kobe Steel receives plant order from Bahrain steel company

March 31, 2010

TOKYO, March 31, 2010 - Kobe Steel, Ltd. announces that it has been awarded a contract to supply a MIDREX® Direct Reduction Plant with an annual capacity of 1.5 million metric tons to Bahrain's United Steel Company (SULB). The contract was signed in Bahrain on March 30.

Under the full turnkey project, Kobe Steel is responsible for the design, equipment supply, construction, and start-up of the facility, which will make direct reduced iron. Direct reduced iron (DRI) is used as a supplement or substitute for high-quality scrap in electric steelmaking. The value of the order was not disclosed.

This is the second recent order for a MIDREX Plant for the Kobe Steel Group. In December last year, Midrex Technologies, Inc., a wholly owned subsidiary of Kobe Steel, received a contract to supply MIDREX technology for a plant in India.

SULB's direct reduction plant will be constructed in the Hidd Industrial Area in Bahrain adjacent to an iron ore pellet plant that Kobe Steel constructed for Gulf Industrial Investment Co.(E.C.). With a capacity of 6 million metric tons a year, the plant went into operation in January 2010.

Kobe Steel anticipates that the direct reduction plant contract will become effective in July 2010. The contract calls for the plant to be completed 30 months after the contract becomes effective. On this schedule, start up of the facility is aimed for early 2013.

SULB is a joint venture between Foulath in Bahrain and Yamato Kogyo Co., Ltd. in Japan. The SULB steel complex will also contain a melt shop and a heavy section rolling mill to be supplied by SMS Concast AG of Switzerland, SMS Meer GmBH of Germany, and Samsung Engineering Co., Ltd. of South Korea.

World direct reduced iron production reached a record high of 68 million metric tons in 2008. Although world production in 2009 was lower, it is on an upward trend in 2010. Kobe Steel and Midrex are working to expand the use of the MIDREX Direct Reduction Process and the next-generation ITmk3® ironmaking process to provide steelmakers with a stable source of clean iron units.
United Steel Company
Joint venture established to construct an integrated steel mill in Bahrain andproduce and market steel products made by the mill.
Established: February 12, 2009
Location: Bahrain
Capital: US$5 million
Equity share: Foulath 51%, Yamato Kogyo Co., Ltd. 49%
Yamato Kogyo Co., Ltd.
Established: November 8, 1944
Location: Japan
Business: Manufacture and sale of steel products
Established: June 26, 2008
Location: Bahrain
Business: Holding company in which Gulf Industrial Investment Co. (E.C.) is a wholly owned subsidiary. GIIC produces and markets iron ore pellets.
Equity: Gulf Investment Corporation 50%, Qatar Steel Company 25%, M.A. Al-Kharafi & Sons Company 10%, National Industries Group 10%, Kuwait Foundry Company 5%
Gulf Investment Corporation (GIC)
Established: 1983
Location: Kuwait
Business: Financial institution providing financial services to promote private enterprise and support economic growth in the Gulf Cooperation Council (GCC) region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).
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