Algeria Emerges as Regional Steel Powerhouse in Direct Reduced Iron Production

Algeria is steadily consolidating its position as one of the Middle East and North Africa region’s fastest-growing direct reduced iron (DRI) producers, supported by expanding industrial capacity, large-scale investment programmes and increasing strategic interest in low-carbon steel production.

A recent report by Global Energy Monitor ranked Algeria among the region’s top three DRI project hubs, behind Libya and ahead of Egypt. According to the report, Libya leads with projects estimated at 11 million tonnes annually, while Algeria accounts for nearly five million tonnes of planned capacity, confirming the country’s growing role in the restructuring of regional steel production.

The momentum has been driven largely by the expansion of the Tosyali complex in Oran, which produced approximately 2.43 million tonnes of DRI in 2025 through its second reduction unit during its first full year of operation. The facility’s original DRI unit also ranked among the world’s leading producers last year, highlighting Algeria’s increasing integration into global steel supply chains.

Direct reduced iron has become a strategic component of modern steelmaking, particularly as global producers seek alternatives to carbon-intensive blast furnace technologies. The process relies on reducing iron ore using natural gas or hydrogen-based agents, generating high-purity iron feedstock for electric arc furnaces widely viewed as central to the future of lower-emission steel manufacturing.

Within this transition, the MENA region is attracting growing international attention due to its gas reserves, renewable energy potential and proximity to European industrial markets. Algeria is increasingly perceived as one of the region’s strongest candidates to benefit from this shift, combining substantial natural gas resources, major solar potential and expanding industrial infrastructure.

The country has also begun attracting renewed foreign investor interest. Earlier this year, Algeria’s Investment Promotion Agency received representatives from Ezz Steel to examine opportunities linked to DRI production and the eventual development of an integrated steel complex covering the full transformation chain of iron and steel products.

Globally, DRI capacity under development in 2025 is estimated at roughly 216 million tonnes annually, according to industry data, although only a limited share has so far entered operational service. Against this backdrop, Algeria appears increasingly positioned to capture a larger share of regional and Mediterranean steel markets as demand accelerates for cleaner industrial production models.

With industrial expansion already underway and additional investment expected, Algeria’s steel sector is progressively evolving from a domestic manufacturing base into a strategic platform capable of supporting broader industrial diversification and long-term export competitiveness.