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Algeria: Steel Industry Overview

Industry was a growing factor in Algerian economy, and in 1990 constituted 10 percent of GDP. Steel production began in El Hadjar near Annaba in the early 1970s, when the government was emphasizing more on heavy industry expansion. A decade later, however, as a result of poor management, shortage of inputs, and bureaucratic influence this plant was operating at 20 percent of its expanded capacity of 2 million tons per year. The Bendjedid government continued to invest in manufacturing, and since 1970s, manufacturers of smaller steel mills have been located in many parts of the country and have created some worthwhile opportunities for private investors.

In 1999, during the reorganization of Enterprise Nationale de Sidérurgie, the El-Hadjar steelmaking operations at Annaba were spun off as Sté. Algérienne de Fabrication Sidérurgique (ALFASID). In 2000, ALFASID produced 841,957 metric tons (t) of liquid steel. Its mills produced 303,377 t of hot-rolled coil, 143,142 t of cold-rolled coil, 83,498 t of galvanized products, and 157,016 t of rounds and wire rod. ALFASID continued its modernization program in 2000 with the renovation of 21 of the 65 furnaces in coke oven battery No. 1 by awarding Voest-Alpine Industrieanlagenbau GmbH & Co. of Austria the contract to rehabilitate the hot-rolling mill. In July 2000, SIDER - Entreprise Nationale de Sidérurgie awarded VOEST-ALPINE INDUSTRIEANLAGENBAU (VAI) a contract for the revamping of the hot strip mill located at the El Hadjar works of their subsidiary ALFASID (Annaba, Algeria). The contract was valued at approx. EUR 50 m. The revamped hot strip mill was successfully commissioned in June 2002.

LNM Holdings N.V. of the Netherlands Antilles acquired 70% equity interest in ALFASID in 2001; the Groupe Industriel Sider retained 30% interest. The new steel company was named Ispat Annaba s.p.a. Voest-Alpine Industrieanlagenbau GmbH & Co. of Austria continued work on the rehabilitation of the hot strip mill at Ispat Annaba’s El Hadjar works that had been contracted for prior to the sale of the steelworks. LNM Holdings also acquired 70% equity interest in the Boukhrada and Ouenza iron ore mines from FERPHOS and renamed the new iron ore company Ispat Tebessa.

Algeria's non-fuel minerals were used extensively as raw material for domestic manufacturing, but some, such as high-grade iron ore, phosphate, mercury, and zinc, have also been exported since the early 1970s. The state mining and prospecting corporation, the National Company for Mineral Research and Exploration (Société Nationale de Recherches et d'Exploitations Minières), was established in 1967. As a result of the government's decentralization policy, the company was restructured in 1983 into separate production and distribution entities. The most important of these were an iron ore and phosphate company known as Ferphos, which had three production units and a port complex at Annaba, and another company called Erem that specialized in conducting mineral research at Boumerdas on the Mediterranean Sea and Tamanrasset in the south.

Iron ore is found at Beni Saf in the northwest and the Ouenza and Bou Khadra region near the eastern border. Production levels have tended to vary significantly over the years, fluctuating between 1 million and 2 million tons between the early 1970s and the early 1990s. The deposits at Ouenza represent 75 percent of total production and have been exported primarily to Italy and Britain. However, there are massive reserves of medium-grade ore at Gara Djebilet, near Tindouf in the west. These deposits of an estimated 2,000 million tons of medium-grade ore have been said to be the largest in the Arab world.

Most major mines are linked by rail to Algeria's ports. Djebel Onk phosphate mines near the Tunisian border, as well as the Ouenza iron ore mines, are linked by electric rail line to Annaba.

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