VENTURES AFRICA – Ezz Rolling Mills, a subsidiary of Egypt’s largest steel producer, Ezz Steel, has been awarded a new licence for the production of Direct Reduced Iron (DRI) modules and additional melt shop facilities at Ezz Steel’s facilities in Sokhna-Suez. The steel giant was granted one of its two seized licenses by the Egyptian Industrial Development Authority after undergoing the necessary procedures and meeting the necessary requirements.
The license regained is one of the two production licenses withdrawn by court order last year. A spokesman of the company said Ezz Steel is in advance talk to secure the second.
Ezz Rolling Mills, which is 99 percent owned by Ezz Steel, obtained the license last Wednesday, Nov. 14, after a down payment of 15 percent (50 million pounds)of a total 330 million pounds ($54.1 million), which will be paid over five years after an 18-month grace period. The new licence is only for Ezz Steel’s new expansion and not to Ezz Steel’s current production, which continues to operate normally.
Ezz Steel’s subsidiary had previously been granted a licence for producing the steel billet ore in 2008, but it was withdrawn following an Egyptian court verdict in September 2011 on graft charges related to the illegal sale of steel licences. Apart from withdrawing the two licenses, the court sentenced its ex-chairman Ahmed Ezz and former Industrial Development Authority (IDA) head Amr Assal to 10 years in jail with a LE660 million fine to be paid between them for irregularities in obtaining the licenses.
The company will now restart construction on a $400 million direct-reduced iron and billet plant that is 80 percent complete. The factory, which will produce steel from iron-ore instead of scrap metal, is set to boost the company’s profit margins; Ezz Steel, head of investor relations, Kamel Galal,
Ezz is also close to completing talks with IDA to regain the second DRI-billet license for its Ezz Flat Steel unit, at the same cost, Galal said.
Ezz Steel is Egypt’s biggest publicly traded manufacturer of the metal and the largest independent producer of steel in the MENA region.