It is reported that Qatar Steel Company and Saudi Basic Industries Corporation have signed a MoU with a Mauritanian iron ore producer Societe Nationale Industrielle et Miniere and its partner Sphere Investments Ltd for cooperation in iron ore development.

A new jointly owned Mauritanian company will be established to launch the Project including entering into off take and other service agreements. SNIM and Sphere through a 50:50 holding company will own 50.1% equity in new company with Sabic owning 34.9% and Qatar Steel holding the remaining 15%.

Under the terms of the MoU the partners have agreed to work towards the joint development of the project with the aim of first DR pellet production by 2010. The project will produce DR grade pellets for steel production by leading international producers including Sabic’s Hadeed and Qatar Steel.

Sabic and Qatar Steel will make the investment subject to satisfactory results of a bankable feasibility study which is expected to be ready by late October this year.

SNIM and Sphere are the joint owners of a world class iron ore project Guelb el Aouj Direct Reduction Pellet Project, initially planned to produce 7 million tonnes per annum of direct reduction pellets for a period of over 30 years from a high quality reserve. SNIM commenced operations in 1963 and supplies around 12 million tonnes of iron ore per annum to the internationally traded market.