Turkish Erdemir to build a plant for the production of pellets for $550 million

The plant's planned capacity will be about 3 million tons of pellets per year

The Turkish steel company Erdemir announced its intention to invest approximately $550 million in the construction of a new plant for the production of pellets. SteelData reports about it on its Linkedin page.

The decision to create a new ore-making plant was made after the completion of drilling operations at the Bingel-Avnyk mine site. Iron ore reserves at the mine amount to about 250-300 million tons.

The company expects that the planned annual capacity of the plant will be about 3 million tons of pellets per year. The mine’s reserves will allow the production of approximately 100 million tons of pellets within the framework of this project.

After the completion of the investment, according to preliminary technical and economic assessments, the annual growth of Erdemir’s sales at current prices will amount to about $200-250 million per year. The rate of supplying the company’s enterprises with pellets will increase from 25-30% to 80-85%. The total supply of ore will increase from 15-20% to 40-45%.

As GMK Center reported earlier, Turkish steel enterprises in September 2022 reduced production of steel by 19% compared to September last year – to 2.7 million tons. In January-September of this year, it fell by 9.3% compared to the same period of 2021.

TCUD predicts a reduction in steel output in Turkiye in 2022 by 10%, and the country’s factories are considering the possibility of stopping production due to high energy costs.

Previously, vice-president of the Turkish Steel Exporters Association (CIB) Ugur Dalbeler, called on the Turkish government to provide state support to the steel industry, as the steel sector faces major difficulties in the near future due to rising production costs and low demand for products.