A phased chain: melt first, then sections, then iron from Cameroonian ore

6.1 Five design principles

The diagnosis of Chapters 1 to 3 and the international lessons of Chapter 4 lead to five principles for any ore-to-steel chain in Cameroon, whoever builds it.

1. Start where the import bill is. Billets and other iron units are the largest steel import and the binding constraint on the existing industry [C06][C38]. The first investment should make iron units or billets in Cameroon.
2. Use proven, modular technology. Electric arc furnaces of a few hundred thousand tonnes a year and direct-reduction modules from 0.25 Mtpa to 2.5 Mtpa are standard equipment with long operating records [T13][T20][T21]. A blast furnace is not suited to Cameroon’s fuel or market (Chapter 2).
3. Secure the feed before building the furnace. No phase should depend on a supply that does not yet exist. The first phases run on imported and local scrap and on imported DRI or HBI; direct reduction waits for DR-grade concentrate and a gas contract.
4. Put the chain at the port. Bulk inputs, exports and the gas field are all at Kribi (Chapter 7).
5. Avoid adding to saturated segments without adding iron. New rolling capacity only makes sense if it comes with its own melt shop and a product mix that goes beyond domestic rebar.

6.2 The reference configuration RC-1

Cameroon Steel is developing a steel complex at Mboro, in the Kribi industrial-port zone, with a design capacity of 1 Mtpa of steel, built in phases [X04]. The foundation stone was laid on 30 December 2024 by the Prime Minister, representing the Head of State [X01]. The first phase is focused on reinforcing bar and wire rod, made from steel melted in an electric arc furnace. Cameroon Steel’s sister company, Cameroon Mining Company, holds the Mbalam exploitation permit [X01], and the Kribi zone lists steel linked to mineral exports among its development clusters [Z4].

To discuss the project in engineering terms, Cameroon Steel uses a reference configuration, RC-1, which sets out phases, capacities and indicative utility needs on the basis of international benchmarks. RC-1 is a planning tool; it is not a final design and its figures will change with detailed engineering. Its current edition, RC-1.1 (October 2026), targets the start of Phase 1 works from the first quarter of 2029, once the environmental certificate is obtained, a first heat in the second half of 2030 and ramp-up through 2031; Phase 2 (second melt line and light/medium sections mill) is indicative for 2032 to 2034 and Phase 3 (melt-shop expansion and heavy-section mill) for after 2034, both subject to market and financing; the direct-reduction (DR) module comes later, subject to ore, gas and approvals [F01]. Table 6.1 summarises it, and Figure 10.1 in Chapter 10 shows the sequence.

Table 6.1 RC-1 reference configuration by phase (planned / indicative)

Source: Cameroon Steel, RC-1 reference configuration and model, edition 10 October 2026 [F01]; benchmarks from IFC EHS guidelines and worldsteel as listed in Annex A. The DR module load is derived in Annex A from [T09]. Edition RC-1.1. Status: planned / indicative.

6.3 Phase 1: a melt shop that makes billets in Cameroon

The first phase is the most important, because it creates the capability that the country lacks today: making steel from iron units rather than reshaping steel made elsewhere.

What it does. An electric arc furnace melts a charge of scrap and direct-reduced iron; a ladle furnace adjusts temperature and chemistry; a continuous caster solidifies the steel into billets. The billets are reheated and rolled into reinforcing bar and wire rod. At its nameplate of 0.3 Mtpa of finished product, Phase 1 needs about 0.36 Mtpa of metallic charge, using a metallic yield of 88% and a combined casting and rolling yield of 94% [F01]. With a single furnace of the 40 t class, its expected sustained output is 270 to 300 kt a year; nameplate is reached only with debottlenecking [F01].

Where its iron comes from. National scrap arising, last measured at 53,000 to 61,833 t/yr in 2006 [C42], is already insufficient for the existing mills [C38]. RC-1.1 therefore assumes only about 30 kt/yr of domestic scrap for the works, within a range of 0 to 60 kt/yr [F01]. Phase 1 must run on imported DRI or HBI and imported scrap, which puts its bulk inbound flow through the port at about 351 kt a year, consumables included [F01]. RC-1 treats the share of DRI or HBI in the charge as a design variable, indicatively 20 to 50% with 30% as a planning value [F01]. Imported HBI is a traded commodity: Libyan HBI was offered at about US$370/t delivered to Italy and Türkiye in January 2026 [N03], and international DRI trade reached about 10.8 Mt in 2025 on trade-data basis [T13]. Contracted supply and the delivered cost of these imported iron units are not yet established (Chapter 11, E18).

Where its output goes. Phase 1’s melt shop makes billets, and its output is flexible between rolled products, wire rod and rebar, and merchant billets sold to the existing re-rollers, which import about 60% of their charge as billets: 161 kt in 2023 [C06][C38]. Rebar is saturated at home, with about 627 kt of capacity for about 180 kt of demand [C30], so Phase 1 tonnage has to go where it displaces imports or reaches new buyers: billets for the re-rollers, wire rod (7.8 kt imported in 2023 [C06]), certified rebar where projects require it, and exports within CEMAC. New rebar capacity on its own would close no gap.

What it saves, and what it does not. The economics paper of this series tests the first phase at border prices. On imported scrap and HBI, a Kribi works would retain about US$47 to 181 of foreign exchange per tonne of rebar, against US$48 to 170 for today’s re-rolling of imported billets: essentially the same (White paper 09, Chapter 9). Its rebar would compete behind the 20% tariff rather than at the border price before duty, and merchant billets would match delivered imports only in a low-cost case (White paper 09, Chapter 7; the series’ indicative comparison of a Kribi billet with a delivered import is in White paper 04, Chapter 8). On imported iron units, Phase 1 is therefore not a large foreign-exchange saver. Its case rests on certified quality, on merchant billets for re-rollers that today borrow hard currency to import them, and on the outlet it creates for local iron units, first scrap and later DRI, which is where the saving lies.

Why it comes first. Phase 1 trains operators, maintenance technicians and metallurgists in electric steelmaking, which no Cameroonian training institution currently teaches as a dedicated programme [K02][K03][K04]. It requires a high-voltage connection and port handling of bulk metallics, both of which later phases will reuse. And its average load of about 36 MW is about a third of the initial 100 MW of the 225 kV line being built to the port [F01][Z43]. That 100 MW serves the whole port platform, however: the port, a cement plant and more than 60 zone tenants [Z4][Z54]. An allocation to the steelworks, and power-quality measures for the arc furnace (static VAR compensation and adequate short-circuit capacity at the connection), remain to be agreed.

What it must avoid. Phase 1’s bar and wire-rod mill enters the most saturated part of the domestic market (Chapter 3). Its justification is the melt shop behind it, not additional rolling capacity: whenever merchant billets are worth more to the market than rolled bars, the melt shop’s output should go to the Douala re-rollers that import billets today.

6.4 Phases 2 and 3: sections and heavy long products

Sections are the next step because they are long products made from billets and blooms, need no new process route, and are largely imported. Cameroon imported US$26.3 m of sections and US$58.0 m of fabricated structures in 2023 [C06]. Light angles and flats are rolled locally in small quantities [C25]; medium and heavy sections and H-beams are not produced in Cameroon and are imported [C06].

RC-1’s Phase 2 adds a second melt line, with an electric arc furnace of the 40 t class, a ladle furnace and a caster, and a light and medium sections mill for angles, channels and flats, raising finished capacity to about 0.5 Mtpa, indicatively from 2032 to 2034. The second line is what makes the step possible: one furnace of that class gives at most about 0.32 Mt of liquid steel a year, so the 0.60 Mtpa of metallics that Phases 1 and 2 need cannot be melted without it. Phase 3 expands the melt shop and adds a heavy-section and H-beam mill, reaching the design capacity of 1 Mtpa after 2034 [F01][X04]. Metallic demand rises to about 0.60 Mtpa and then 1.21 Mtpa [F01].

At this scale, two facts become decisive. First, output of 1 Mtpa is more than twice Cameroon’s total chapter 72 imports of 412 kt in 2025 [C05]; more than half of it would have to be exported, to CEMAC neighbours, to West Africa or to wider AfCFTA markets. The timing of Phases 2 and 3 should follow evidence of demand, not a calendar. Second, 1.21 Mtpa of metallics cannot come from scrap. At this point the question of where the iron comes from stops being a sourcing detail and becomes the central strategic issue.

6.5 The direct-reduction module: Cameroonian ore, when its conditions are met

RC-1 reserves space and utilities for a direct-reduction module of about 1 Mtpa of DRI, sized to the melt shop’s iron-unit need at full capacity and subject to ore quality and gas supply, indicatively after 2034 [F01]. RC-1 holds it in reserve rather than scheduling it as a phase: its construction is gated on a set of conditions, not on a date.

Source: Cameroon Steel derivation from RC-1 yields [F01], pellet ratio [N01] and testwork mass yield [O04]; method in Annex A.

The mass flow in Figure 6.1 shows what the module implies. For each tonne of finished long product made entirely from DRI, the chain needs about 1.21 t of DRI, about 1.75 t of DR-grade pellets at 1.45 t per tonne of DRI [N01], about the same tonnage of concentrate, and about 3.9 t of itabirite at the 45% mass yield achieved in testwork [O04]. A 1 Mtpa DRI module therefore needs about 1.45 Mtpa of pellets and about 3.2 Mtpa of itabirite run-of-mine ore.

Compare that with the ore that the 15% rule makes available (Figure 6.2). Fifteen per cent of Mbalam’s road-phase exports would be up to 1.5 Mtpa and of its rail-phase exports 3.75 Mtpa [O25][Z42]; fifteen per cent of Lobé’s planned 2028 concentrate output would be 0.6 Mtpa [O35]. In volume, the obligation covers the need of a 1 Mtpa DRI module. In grade, it does not: Mbalam’s direct-shipping ore is at 62% Fe and Lobé’s concentrate is planned above 60% Fe, whereas a shaft furnace needs a product near 67.5% Fe with low gangue [O05][O35][N16].

Source: RC-1 [F01]; scrap [C42]; Mbalam export plan [O25]; Lobé plan [O35]; 15% rule [Z42]; pellet ratio [N01]. Status: planned / derived.

Table 6.2 sets out the conditions that should be met before the module is built.

Table 6.2 Conditions for building the direct-reduction module on Cameroonian ore

Source: Cameroon Steel analysis; thresholds from the sources shown.

The pelletising step deserves particular attention. In 2011 the former holder’s Mbalam "Stage 2" study envisaged 35 Mtpa of itabirite concentrate at 66% Fe and costed a 4 Mtpa pellet plant at US$400 m within a US$3.1 bn package that also required about 350 MW of power [O01]. A pellet plant sized for a single 1 Mtpa DRI module would be much smaller, about 1.45 Mtpa. It could sit at the mine, which avoids moving moisture-laden concentrate, or at Kribi, which allows it to serve both the DR module and export customers. That choice belongs in the feasibility work that the DR module requires.

6.6 Carbon: the phased chain starts low and stays below the world average

Electric steelmaking on Cameroon’s grid starts with a low carbon footprint. The latest published emission factor for that grid is about 226 g CO₂/kWh, for 2024, a year in which the same Ember dataset puts hydropower at about 72% of generation [E56][E57]. The electricity regulator reports a higher hydropower share for 2025, about 90% [E15]; no emission factor has yet been published for that year. RC-1 keeps 226 g as a conservative planning value [F01]. On that basis, Phase 1’s estimated intensity is about 0.32 t CO₂ per tonne of finished steel for direct (scope 1) and electricity (scope 2) emissions, and about 0.58 t including the upstream emissions of the imported DRI in the charge [F01]. For comparison, worldsteel’s 2024 averages are 0.69 t for scrap-based EAF, 1.47 t for DRI-EAF and 2.34 t for blast furnace and basic oxygen furnace, with a world average of 1.92 t [T01].

A gas-based DR module raises the chain’s direct emissions; on a direct and indirect basis, the IEA puts gas DRI-EAF at about 1.4 t of CO₂ per tonne against 2.2 t for the blast-furnace route [T02]. But it keeps the chain well below the blast-furnace route, and modern shaft furnaces can take hydrogen: one supplier reports a 53% reduction against the blast-furnace route with natural gas and 86% with 100% hydrogen [T09]. Since the EU’s carbon border adjustment mechanism (CBAM) covers DRI, billets, rebar, wire rod and even iron-ore pellets [D08], and its certificate price reached €82.32/t of CO₂ in the third quarter of 2026 [D05], a low and verified carbon intensity is a commercial asset for any export.

6.7 Why this order, and not another

Three alternative sequences were considered and set aside.

• Direct reduction first. Building a DR module before a melt shop would require, at once, DR-grade feed that does not yet exist at scale, a gas contract that has not been negotiated, and a melt shop large enough to absorb about 1 Mtpa of DRI or an export market for HBI. It concentrates every risk in a single investment, the pattern that failed at Ajaokuta (Chapter 4).
• A pellet plant at the mine for export only. Exporting DR-grade pellets rather than direct-shipping ore would add value and could be an excellent business in a market short of DR pellets [N01][N02]. It is complementary to the phased chain rather than an alternative: the same pellets can feed a Kribi DR module later. It does not by itself create a steel industry.
• More rebar capacity. Adding rolling capacity without a melt shop would deepen the saturation of Chapter 3 and increase billet imports.

The phased order follows the pattern of the successful cases. It starts where the import bill is, as Egypt’s semi-finished imports show was necessary; it starts at a deep-water port on imported raw materials, as Vietnam’s coastal complex did with imported ore; and it integrates backwards into national ore once grade, energy and scale are proven, as Algeria is now doing with Gara Djebilet.