Azerbaijan and Kazakhstan to jointly build a $700 million HBI plant

A plant with a capacity of 2 million tons of HBI per year will be built in the Shamkir district, with launch expected in 2029

On September 23, 2025, as part of the First Azerbaijan International Investment Forum (AIIF 2025) in Baku, an agreement was signed to establish a joint venture between Dashkasan Iron Ore LLC and Kazakhstan’s Fonte GreenMet Investments Fund OEIC LLC. This was reported by AzerGold.

The new company is called Azerbaijan Metal Company LLC and will focus on the construction and operation of a hot briquetted iron (HBI) plant with a capacity of 2 million tons per year in the Shamkir district of Azerbaijan. The project is scheduled to launch in early 2029.

Under the agreement, the joint venture will be responsible for financing, designing, building, and managing production. Total investment is estimated at around $700 million, with foreign investors participating in the implementation, reducing the burden on Azerbaijan’s state budget.

The project is based on the development of an iron ore deposit in Dashkasan, which has a number of challenges – low iron content (about 40%), deep deposits, and no access to international waterways. That is why a strategy of creating high value-added products was chosen. Following consultations with international companies, a three-stage production scheme was defined: the manufacture of concentrate with an iron content of over 67%, the production of pellets, and the subsequent release of HBI.

The implementation of the project will have a significant economic effect. The plant is expected to contribute approximately $694 million to the country’s GDP annually, provide approximately 1,600 jobs, and create up to 4,000 jobs in total. In the long term, full implementation of the program could add up to $13 billion to GDP and strengthen the raw material security of Azerbaijan’s metallurgical industry.

It should be noted that the global supply of direct reduced iron (DRI), hot briquetted iron (HBI), and pig iron will gradually increase. Currently, the key technologies for producing green steel are based on electrometallurgy, where the main raw material is scarce scrap.