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.
