Glencore Secures Long-Term Supply Deal for Low-Carbon Iron Project in Oman

Muscat | EcoPulse24

Glencore has signed a long-term purchase agreement to secure supplies of hot briquetted iron (HBI) from a planned industrial project in Oman, highlighting the growing demand for low-emission steel inputs amid changing regulations in European markets. The deal grants Glencore stable access to this essential material for electric arc furnace operations starting in 2030.

Under the agreement, Glencore commits to buying at least 500,000 tons annually, with supply potentially reaching up to 1.25 million tons per year from the Meranti Green Steel project, according to the project developer. Additional supply agreements have been signed with INTERFER Global Steel Trading and INTERFER Austria, while thyssenkrupp Materials Services is in discussions to secure supply shares from the same facility.

The project aims for a full operational capacity of 2.5 million tons of HBI per year. HBI, a high-purity, easily transportable iron product, is a key input - alongside scrap - for electric arc furnaces to meet steel quality requirements. Project leaders note that 10% to 30% of virgin iron remains necessary to ensure final product quality.

Roughly two-thirds of production is intended for European steel mills, with the EU's new carbon border adjustment mechanism serving as a main driver for the project. Construction of the plant is scheduled to begin in late 2026 following a final investment decision, with a production process relying on a mix of natural gas and green hydrogen to lower the carbon footprint across the supply chain.

Analysis
The agreement reflects a global supply chain shift toward low-emission steel inputs, driven by stricter environmental policies in Europe and the expansion of electric arc furnaces. Oman was chosen for its logistical proximity to Europe, access to energy and gas, and future potential for integrating green hydrogen. This approach strengthens the Middle East's position as an emerging hub for green steel projects, positioning major trading companies as key players in distributing high-quality virgin iron across multiple markets.