Oman is emerging as a frontrunner in the global race to produce green iron and steel, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The report, Oman at the Frontline of the Green Steel Transition, authored by Soroush Basirat, Energy Finance Analyst for Global Steel at IEEFA, finds the nation is uniquely positioned to capitalise on the decarbonisation of heavy industry as the world moves away from carbon-intensive steelmaking.
A new generation of direct reduced iron facilities is being developed in Oman, featuring flexible technologies that allow use of hydrogen from the outset. This approach could set a new standard for the green iron transition.
“Oman is one of the few nations in the Middle East and North Africa region with an integrated steelmaking supply chain,” Basirat says.
“Having this established industrial base gives it a solid foundation for transitioning towards low-emission and ultimately green iron and steel production.”
Oman also leads in global iron ore concentrate supply to electric arc furnaces (EAFs) for steelmaking. This established industrial base provides a solid foundation for transitioning towards low- emission iron and steel production – and ultimately green iron and steel. Oman’s iron and steel sector has traditionally been dominated by two major players, Jindal Group and Vale.
Now, the country is attracting new international initiatives, such as Meranti Green Steel, Mitsui and Kobe Steel, and Jinnan Steel, which are entering and reshaping the market.
Based on the projects currently in the pipeline, an additional 12.6 million tonnes per annum of concentrate, 6Mtpa of pellets, and 12.5Mtpa of direct reduced iron (DRI)/hot-briquetted iron (HBI) are expected to be added to the country’s existing production capacity.
By establishing these new capacities, IEFFA’s reports says Oman aims to position itself as a regional hub for iron production. Several large-scale low-emissions ironmaking projects are expected to reach final investment decision (FID) by 2026, and integrating green hydrogen with iron production represents a promising step for Oman toward achieving net zero emissions by 2050.
Oman’s iron and steel ecosystem already includes pelletising, direct reduction, and electric arc furnace (EAF) facilities, with plans to expand domestic iron ore concentration.
This industrial structure makes the country particularly well placed for the transition to direct reduced iron (DRI) production using green hydrogen instead of fossil gas.
The report highlights that Oman’s success will hinge on replacing gas-based DRI, which remains emissions-intensive, with green hydrogen, a shift that could allow the country to command a green premium in global steel markets.
Bolstered by vast solar and wind energy potential, Oman is targeting 1-1.5 million tonnes of green hydrogen production by 2030. Its steel sector is expected to be a key offtaker in this emerging hydrogen economy.
The nation’s strategic location, access to open seas, and abundant development land further strengthens its competitive edge in supplying low-carbon iron and steel to export markets across Europe and Asia, IEEFA finds.
New players, including Meranti Green Steel, Mitsui, Kobe Steel, and ACME Group, are joining established producers Jindal Group and Vale to spearhead flexible, hydrogen-ready DRI facilities that blend gas and hydrogen from the outset.
“Oman stands at a pivotal moment,” says Basirat.
“With the potential to supply green iron to markets such as the EU cost-competitively, the country holds a significant advantage over other producers – and it is managing the transition in a highly structured way.”
Under its Oman Vision 2040 and National Hydrogen Strategy, the Sultanate is driving industrial diversification and aiming to lift its non-oil GDP share above 90%, positioning itself as a global hub for sustainable heavy industry and clean energy exports.
Write to Adam Orlando at Mining.com.au
Images: IEEFA
