Oman Green Iron Project Secures Full Offtake Backing: What This Means for Investors and Business Growth in Oman
MUSCAT, NOV 20 — In a major development for Oman’s growing green steel sector, Singapore-based Meranti Green Steel has secured commitments for the entire output of its forthcoming Hot Briquetted Iron (HBI) production. HBI, a critical raw material for steel manufacturing, will be produced at Meranti’s planned facility in Duqm, Oman.
Meranti announced that it has signed preliminary, non-binding offtake term sheets covering 2.5 million tons per annum (Mtpa) of HBI from the project’s first phase, with agreements also in place for a potential second phase that could double this volume. The company’s Founder and CEO, Sebastian Langendorf, shared this update during the Fastmarkets Middle East Iron & Steel Conference in the UAE.
The initial phase will see the establishment of a 2.5 Mtpa HBI plant within the Special Economic Zone at Duqm (SEZAD). This plant will use a carefully balanced combination of natural gas and green hydrogen, with plans to gradually increase hydrogen use to reduce carbon emissions. Part of the HBI output will supply Meranti’s upcoming green steel facility in Rayong, Thailand, while some will be offered to UK steel producers seeking low-carbon feedstock.
Meranti intends to reach a Final Investment Decision (FID) by mid-2026, aiming for commissioning by mid-2029. Langendorf emphasized that the offtake agreements signal a turning point for green HBI: “Green HBI is no longer just an idea. It is becoming a bankable, merchant input for green steelmaking.” He added that without dependable, competitively priced low-emission iron feedstock, the steel industry’s decarbonization will falter. Meranti’s cross-border model links green HBI production in Oman with green steel manufacturers, including its own plant in Thailand, all designed for reduced emissions and cost efficiency from the start.
This announcement positively impacts the broader green iron and steel ambitions at Duqm SEZ, where various projects anticipate leveraging green hydrogen availability starting around 2030. Notably, Brazilian mining giant Vale plans an integrated complex to produce HBI and other low-carbon iron products using green hydrogen and clean energy. Similarly, Kobe Steel and Mitsui & Co. have signed MoUs with Omani authorities to develop a low-CO₂ iron project in Duqm.
Additionally, India’s ACME Group, which is developing a green ammonia facility at Duqm SEZ, is considering Oman for a 1.2 Mtpa direct reduced iron (DRI) plant fueled by green hydrogen. ACME has also signed a binding term sheet with Stavian Industrial Metal, a Vietnam-based group, securing the long-term sale and purchase of 0.8 Mtpa of green iron feedstock, including HBI and DRI, on a take-or-pay basis for ten years.
Oman’s strategic goal is to establish Duqm SEZ as a leading green industrial hub, using locally produced green hydrogen to attract energy-intensive, hard-to-abate industries such as green steel and iron, green aluminium, chemicals, fertilisers (including green ammonia), and advanced manufacturing reliant on low-carbon metals. These industries are expected to form a strong cluster in Duqm as green hydrogen and renewable energy become widely available.
Special Analysis by Omanet | Navigate Oman’s Market
Oman’s strategic push into green steel via the Duqm SEZ, backed by major international investors like Meranti Green Steel, signals a transformative opportunity for the Sultanate to become a key player in low-carbon industrial production. Businesses and investors should watch for growth in green hydrogen infrastructure and associated industries, positioning Oman as a competitive hub for sustainable, energy-intensive sectors. Smart investors must consider the long-term potential of green steel and related supply chains as decarbonization efforts accelerate globally.
