KIMA Signs Agreement with Al-Sharq Al-Haqiqi for Silico-Manganese Alloy Production

CAIRO – 16 January 2025: The Egyptian Chemical Industries Company (KIMA) has entered into an agreement with Al-Sharq Al-Haqiqi for Investment, an Egyptian company backed by Saudi investments, to operate and utilize an electric arc furnace for the production of silico-manganese alloys. The partnership is expected to generate an annual revenue of 1.8 million dollars for the state-owned company.

The agreement grants Al-Sharq Al-Haqiqi the rights to operate the furnace, owned by KIMA, which was rehabilitated at a cost of 53 million Egyptian pounds. The contract spans seven years, beginning from the final handover of the furnace, and can be renewed for similar terms under a new agreement between the parties, to be finalized six months before the current contract expires.

Al-Sharq Al-Haqiqi has also secured manganese ore mining rights in the Abu Shaar region and conducted extensive research with its team of experts and technicians. This effort included laboratory and field experiments to evaluate ore utilization and produce silico-manganese alloys meeting global standards, which are essential for the iron and steel industry.

Rehabilitated Furnace Back in Operation

Minister of Public Business Sector Mohamed Shimi noted that the furnace, out of operation for five years, was rehabilitated by the Egyptian Iron Alloys Company, affiliated with the Ministry of Public Business Sector, at a total cost of 53 million Egyptian pounds.

Under the agreement, KIMA has entrusted Al-Sharq Al-Haqiqi with the operation, maintenance, and marketing of silico-manganese alloys produced in accordance with international standards. In return, Al-Sharq Al-Haqiqi will pay KIMA 75 dollars per ton of produced alloys, in addition to 30 percent of the value of by-products generated during production.

Production and Revenue Expectations

The furnace is projected to produce 18,000 tons annually of silico-manganese, generating 1.4 million dollars in revenue for KIMA, with an additional 400,000 dollars from by-product sales. This brings KIMA’s total annual revenue from the agreement to an estimated 1.8 million dollars. Al-Sharq Al-Haqiqi has also committed to a guaranteed minimum annual payment of 600,000 dollars to KIMA.

Commitment to Safety and Efficiency

Al-Sharq Al-Haqiqi will ensure the furnace’s operational integrity, conducting all necessary maintenance and improvements to maintain efficiency. The company is also required to comply with industrial, health, and environmental safety standards, including proper waste management practices.

This agreement signifies a major step in utilizing local resources and technical expertise to drive industrial growth and enhance revenue generation.