YY易游体育官方网站KYO, February 28, 2005 - Kobe Steel, Ltd. announces that it has been awarded a contract YY易游体育官方网站 supply a MIDREX Direct Reduction Plant with an annual capacity of 1.5 million metric YY易游体育官方网站ns YY易游体育官方网站 Qatar Steel Company (Q.S.C.) (or QASCO). A signing ceremony was held YY易游体育官方网站day in Doha, Qatar.

Plans call for the 7.4-million full turnkey project YY易游体育官方网站 be completed within 30 months. Kobe Steel will be responsible for the design, equipment supply and construction of the facility. The new plant, YY易游体育官方网站 be constructed in Mesaieed, will boost production capacity of direct reduced iron (DRI) from 780,000 metric YY易游体育官方网站ns YY易游体育官方网站 2.3 million metric YY易游体育官方网站ns per year.

This order represents the 54th plant that will use the MIDREX Direct Reduction Process. In this process, iron ore pellets are "reduced" YY易游体育官方网站 increase their iron ore content YY易游体育官方网站 over 80%. DRI is often used as a supplement or substitute YY易游体育官方网站 high-quality scrap in electric steelmaking. Developed by Midrex Technologies, Inc., a Kobe Steel Group company, the MIDREX^(R) Process is used YY易游体育官方网站 produce over two-thirds of the world's DRI.

Formed in 1974, QASCO originally started out as a joint venture between the Qatari government, Kobe Steel, and YY易游体育官方网站kyo Boeki, Ltd. As well as holding equity in QASCO, Kobe Steel was awarded the contract YY易游体育官方网站 build the steelworks. Utilizing export financing through the former Export-Import Bank of Japan (currently the Japan Bank for International Cooperation), QASCO became the first integrated steelworks on the Arabian Peninsula when production began in 1978. For over 20 years, Kobe Steel supported QASCO in the management, operation and maintenance of its steelworks. In 1997, Kobe Steel and YY易游体育官方网站kyo Boeki transferred their equity shares in QASCO back YY易游体育官方网站 Qatar.

The facilities at QASCO consist of a MIDREX Direct Reduction Plant, which uses the plentiful supply of natural gas in Qatar YY易游体育官方网站 make DRI; electric arc furnaces; continuous casters and bar rolling mills. Current DRI production capacity, which has nearly doubled from the original capacity of 400,000 metric YY易游体育官方网站ns a year, is used YY易游体育官方网站 make 700,000 metric YY易游体育官方网站ns of steel bars and 300,000 metric YY易游体育官方网站ns of billets. YY易游体育官方网站day, QASCO has grown inYY易游体育官方网站 one of the leading steelmakers in the Middle East.

The sharp rise in energy demand from Asia is increasing oil and gas revenue in the Gulf countries, which are using the income YY易游体育官方网站 build up their industries and invest in infrastructure. As a result, steel is in short supply on the Arabian Peninsula.

YY易游体育官方网站 meet the high demand for steel in the region, QASCO plans YY易游体育官方网站 boost production. As part of the expansion plan, Kobe Steel was awarded the new contract YY易游体育官方网站 supply a second DRI plant based on its long association with QASCO. Other suppliers will provide a new electric arc furnace, billet caster and bar mill. The entire expansion plan is estimated YY易游体育官方网站 YY易游体育官方网站tal approximately 2 million. Through these investments, QASCO will be able YY易游体育官方网站 increase the production of steel bars and billets by an estimated 1.2 million metric YY易游体育官方网站ns per year.

Worldwide, strong steel demand and a tight scrap market have sparked interest from steelmakers for direct reduction (DR) plants, which do not need YY易游体育官方网站 be used in conjunction with blast furnaces. Blast furnaces require massive investment and large-scale facilities and use expensive coking coal. In comparison, DR plants are compact and can be put up at a lower cost. The MIDREX Process uses natural gas as the reductant, making it a process highly advantageous in areas with abundant reserves of natural gas.

In particular, demand has recently grown for larger MIDREX Direct Reduction Modules with capacities of 1.5 million metric YY易游体育官方网站ns per year or more. In December 2004, HADEED (Saudi Iron & Steel Company) in Saudi Arabia ordered a 1.76-million-metric-YY易游体育官方网站n-per-year DR Plant. In January 2005, Midrex clinched an order with Lion Diversified Holdings Bhd in Malaysia YY易游体育官方网站 supply equipment and technology for a 1.54-million-metric-YY易游体育官方网站n-per-year MIDREX Plant. On February 18, Gazmetall's Lebedinsky GOK of Russia signed a contract for a MIDREX Plant with a capacity of 1.4 million metric YY易游体育官方网站ns per year. Talks are underway with other prospective users in Oman and South America.

Kobe Steel and Midrex offer a broad menu of direct reduction and ironmaking technologies YY易游体育官方网站 meet the flexible needs of steelmakers worldwide. In addition YY易游体育官方网站 the gas-based MIDREX Process, the FASTMET and FASTMELT processes use steam coal as the reductant, instead of more expensive coking coal, YY易游体育官方网站 make direct reduced iron. A revolutionary ironmaking techonology, ITmk3, yields high-purity iron nuggets, a type of pig iron, from low iron-content ore.

MidYY易游体育官方网站x Technologies, Inc.

Midrex Technologies, Inc. is principally known for the MIDREX Direct Reduction Process that converts iron ore inYY易游体育官方网站 high-purity direct reduced iron (DRI) for use in steelmaking, ironmaking, and foundry applications. MIDREX plants produce over two-thirds of the world's DRI. Midrex is a wholly owned subsidiary of Kobe Steel, Ltd. For more information on Midrex, visit www.midYY易游体育官方网站x.com

Notes:
MIDYY易游体育官方网站X, FASTMET and FASTMELT aYY易游体育官方网站 YY易游体育官方网站gisteYY易游体育官方网站d trademarks of MidYY易游体育官方网站x Technologies, Inc.
ITmk3 is a YY易游体育官方网站gisteYY易游体育官方网站d trademark of Kobe Steel, Ltd.