Emirates Steel Arkan and AD Ports to set up Abu Dhabi low-carbon iron supply chain complex

Abu Dhabi-listed companies have teamed up with Japanese firms Itochu Corporation and JFE Steel for the project

Emirates Steel Arkan supplies products to the manufacturing and construction sectors in the UAE and more than 70 international markets. Khushnum Bhandari / The National

Emirates Steel Arkan, the UAE's largest public steel and building materials business, and AD Ports Group, the operator of industrial cities and free zones in Abu Dhabi, have signed a non-binding initial agreement with Japanese firms to establish a low-carbon iron supply chain complex in Abu Dhabi.

The project intends to create a low-emission iron supply chain reducing the carbon footprint and contribute to the global iron and steel industries.

The Japanese groups include Tokyo-based Itochu Corporation that trades in a wide range of products and materials, and JFE Steel, one of the largest steel manufacturers in the East Asian country.

The agreement was signed during the UAE-Japan business forum in Abu Dhabi in the presence of Japanese Prime Minister Fumio Kishida and Sheikh Hamed bin Zayed, Member of Abu Dhabi Executive Council.

“This project holds immense strategic importance to Abu Dhabi as it not only enhances our industrial capabilities but also demonstrates our commitment to fostering innovation, sustainability and economic diversification,” Saeed Al Remeithi, group chief executive of Emirates Steel Arkan, said in a statement on Tuesday.

“By leveraging the expertise and resources of our partners, we aim to create a world-class steel production complex that provides low-emission solutions to the global steel industry, further setting new standards in quality and environmental stewardship."

Formed after the merger of Emirates Steel and Arkan Building Materials in 2021, Emirates Steel Arkan is majority owned by Abu Dhabi holding company ADQ.

It supplies products to the manufacturing and construction sectors in the UAE and more than 70 international markets. It more than doubled its first-quarter net profit on higher sales.

The new complex aims to produce low-carbon emission raw materials for use in steelmaking, Emirates Steel Arkan said.

It will enable the Abu Dhabi-listed company to capture and meet the growing demand for environmentally friendly steel products while strengthening the UAE’s sustainable industrial ecosystem.

The UAE aims to reach net zero by 2050, with new investments worth Dh600 billion planned in clean and renewable energy sources over the next three decades.

Emirates Steel Arkan has pledged to reduce its carbon emissions by 40 per cent by 2030 and achieve net-zero emissions by 2050, in line with the UAE’s carbon-reduction targets and its goals for exporting low-carbon steel.

The new project will be staggered over several phases and include pellet plants, direct reduction plants, smelter furnaces and other relevant infrastructure.

AD Ports will be responsible for providing the land for new plant in Kezad Musaffah, as well as offering maritime and logistics services for the supply of iron ore and the export of low-carbon emission raw materials around the world.

“This ... initiative will not only meet the growing demand for environmentally friendly steel products, but also strengthen the UAE's position as a global leader in sustainable steel production and a driving force behind decarbonisation,” said Mohamed Al Shamisi, managing director and group chief executive of AD Ports Group.