Shadeed Iron and Steel, the Omani subsidiary of Jindal Steel & Power Ltd, has started trial production nearly four months ahead of schedule.
Shadeed, the under-construction plant that Jindal Steel & Power acquired in May this year, started production of hot briqueted iron (HBI) on 5 December 2010, ahead of the targeted 31 March 2011, the company said in a filing with the Bombay Stock Exchange (BSE).
The $464-million investment in reviving the Omani unit gives the Indian steel major access to direct iron technology of Japan's Kobe Steel and USA'a Midrex, both leaders in direct iron technology.
Jindal Steel said it will be using the same technology in its Odisha facility.
Shadeed has installed a 1.5 MTPA gas-based HBI plant at Sohar Industrial Port area of Sohar, Oman. This facility will help Jindal Steel serve the strong demand for steel in the Middle East and North African countries, which has an anticipated supply shortfall of over 12 million tonnes.
Shadeed is the third major overseas transaction by India Inc so far in 2010 after Bharti purchase of Zain's Africa operations for $10.7 billion and Reliance Industries acquisition of a stake in US-based Atlas Energy for $1.7 billion.
Jindal's purchase is also the third-biggest overseas effort by an Indian steel maker after Tata Corus and Essar's buyout of Canada's Algoma.