Libya’s emerging low-carbon iron platform and a potential Mediterranean gateway for African steel exports
The Tosyali SULB Benghazi DRI Complex is being developed as a large-scale direct reduced iron platform on Libya’s Mediterranean coast. The Turkish-Libyan joint venture combines Tosyali Holding, an international steel producer, with Libya United Steel Company for Iron and Steel Industry (SULB).
Reuters reports that the project is expected to attract approximately US$2.5 billion in investment and begin commercial production in early 2028. Its planned DRI production is designed around natural gas rather than coal, producing iron with lower emissions than conventional coal-based blast-furnace routes.
The project is particularly significant because it is designed primarily as an export-oriented industrial platform. Around 90% of production is expected to be exported, while the wider complex will also produce reinforcing steel and pipes for the Libyan market.
Its Mediterranean location gives Benghazi potential access to European and African markets, while the project’s MIDREX Flexi technology provides a pathway toward greater hydrogen use as the energy system evolves.
WHY THIS PROJECT MATTERS
01. INDUSTRIALISATION BEYOND OIL
Libya’s economy has historically been dominated by hydrocarbons. The Benghazi complex introduces a different proposition: converting energy availability and coastal logistics into large-scale industrial manufacturing capacity.
The project therefore matters not only as a steel investment, but as part of Libya’s attempt to broaden its industrial base.
02. LOW-CARBON IRON
DRI is increasingly important to the global steel industry’s decarbonisation pathway because it can use natural gas instead of coal and can potentially transition toward hydrogen.
The MIDREX Flexi technology selected for the project is designed with hydrogen capability, creating a potential pathway from gas-based DRI toward lower-carbon iron production as hydrogen economics and infrastructure develop.
03. MEDITERRANEAN MARKET ACCESS
Benghazi’s coastal position is strategically important.
Rather than developing an inland industrial project dependent on multiple transit jurisdictions, the complex is positioned to serve markets across the Mediterranean, Europe and Africa. That geographic proposition becomes particularly relevant as European steelmakers face increasing carbon-compliance requirements and seek lower-emission metallic inputs.
04. EXPORT-LED INDUSTRIAL CAPACITY
Approximately 90% of output is expected to be exported.
That makes the project fundamentally different from an industrial plant designed primarily to satisfy domestic demand: its economics will depend heavily on international competitiveness, shipping efficiency, product quality and access to external steel markets.
05. A NEW NORTH AFRICAN STEEL NODE
Tosyali already has steel investments across Turkey, Algeria, Senegal, Angola and Spain. The Benghazi project extends this industrial network deeper into North Africa and positions Libya within an emerging regional DRI/HBI supply chain.
PROJECT ARCHITECTURE
- NATURAL GAS / FUTURE HYDROGEN
- MIDREX FLEXI DRI
- DIRECT REDUCED IRON
- HOT BRIQUETTED IRON / IRON PRODUCTS
- EXPORT MARKETS
- STEELMAKING
Alongside the DRI facilities, the project is being developed with supporting infrastructure, including a 220kV substation, raw-material handling facilities, transport infrastructure and a dedicated power station intended to provide a substantial portion of the complex’s electricity requirements.
The original 2024 project announcement envisaged three phases reaching 8.1 million tonnes of DRI capacity, beginning with a 2.7 million-tonne first phase. The current project website presents a revised configuration of up to 7.5 million tonnes annually, with Phase I at up to 2.5 million tonnes. It currently reports approximately 40% completion.
INVESTMENT MODEL
The project is being developed through Tosyali SULB Steel Industries Joint Company, a joint venture between:
- Tosyali Holding — Turkey
- Libya United Steel Company for Iron and Steel Industry (SULB) — Libya
The structure combines international steel-sector expertise with a Libyan industrial partner.
This is strategically relevant because the project is not being positioned merely as a foreign-owned export facility. It is being structured around a local–international industrial partnership, with the stated objective of strengthening Libya’s domestic iron and steel capabilities while creating an export platform.
FINANCING ENGINE
Reuters reports that the complex is expected to attract approximately US$2.5 billion in investment. The available public information does not provide a sufficiently detailed breakdown of the proposed capital stack between equity, debt, development finance, commercial lending or other financing instruments.
AFNIS assessment: the scale of the investment means financing execution will be a critical project milestone alongside construction progress, gas availability, power infrastructure and market development.
The project’s phased architecture provides a potential mechanism for staged capital deployment, allowing capacity and supporting infrastructure to expand progressively rather than requiring the full industrial complex to be financed and commissioned simultaneously.
STRATEGIC VALUE CHAIN
- NATURAL GAS
- IRON ORE / RAW MATERIAL INPUTS
- DRI PRODUCTION
- HBI / IRON PRODUCTS
- EXPORT LOGISTICS
- EUROPEAN & AFRICAN STEELMAKERS
- STEEL PRODUCTS
- CONSTRUCTION / INFRASTRUCTURE / MANUFACTURING
The strategic opportunity is therefore broader than DRI production.
If successfully integrated with downstream steelmaking, the complex could support a wider industrial ecosystem spanning iron production, steel products, construction materials, pipes and associated manufacturing services.
INVESTMENT LENS
| Indicator | AFNIS Assessment |
|---|---|
| Strategic Importance | ★★★★★ |
| Investment Scale | ★★★★★ |
| Industrialisation Potential | ★★★★★ |
| Export Potential | ★★★★★ |
| Technology Significance | ★★★★☆ |
| Government / Local Industrial Participation | ★★★★☆ |
| Energy Advantage | ★★★★☆ |
| Infrastructure Readiness | ★★★★☆ |
| Regional Significance | ★★★★☆ |
| Decarbonisation Potential | ★★★★☆ |
| Replicability in Africa | ★★★★☆ |
AFNIS assessment: ratings reflect the project’s scale, export orientation, industrial architecture, technology pathway and geographic positioning. They are analytical assessments rather than official project ratings.
AFRICAN INVESTMENT OPPORTUNITY
The most important opportunities extend beyond the core DRI facility.
- Industrial Infrastructure: Power systems, substations, water systems, industrial utilities and plant-support infrastructure.
- Logistics: Port, shipping, warehousing and regional distribution infrastructure connecting Benghazi with Mediterranean and African markets.
- Steel Downstream: Rebar, pipes and other steel products can support Libya’s construction and infrastructure sectors.
- Engineering & Services: Equipment maintenance, fabrication, technical services, industrial automation and specialist engineering.
- Energy Transition: The project’s hydrogen-ready DRI technology creates longer-term opportunities around hydrogen supply, renewable power and lower-carbon iron production.
- Regional Steel Supply: African steelmakers could increasingly become customers or partners within a regional metallics supply chain.
KEY RISKS / WATCHPOINTS
01. Political & Institutional Risk
The project is located in eastern Libya, where the country’s political and institutional fragmentation remains a material consideration for international investors.
02. Execution Risk
A project of this scale requires simultaneous execution across DRI facilities, energy infrastructure, raw-material logistics and export systems.
03. Gas Dependence
The first phase relies on natural-gas supply. Long-term competitiveness will depend on reliable and economically viable energy availability.
04. Export-Market Risk
With approximately 90% of output intended for export, project economics will be exposed to international iron and steel prices, freight rates, trade policy and European carbon-related requirements.
05. Hydrogen Economics
The project’s hydrogen capability is strategically valuable, but the transition from gas-based DRI to materially higher hydrogen utilisation will depend on future hydrogen supply, infrastructure and cost competitiveness.
WHAT AFRICA CAN LEARN
- Turn energy advantage into industrial capacity: Countries with competitive gas or renewable-energy resources can use them to move beyond commodity exports into energy-intensive manufacturing.
- Location is an investment asset: Benghazi’s Mediterranean position provides a potential bridge between African production and European industrial demand.
- Build for the next technology cycle: Hydrogen-ready DRI allows the project to begin with an available energy source while maintaining a pathway toward lower-carbon production.
- Export orientation can support scale: A large industrial complex does not have to depend exclusively on domestic demand. Regional and international markets can provide the scale required to justify major industrial investment.
- Industrial partnerships can accelerate capability transfer: The Tosyali–SULB model combines international technical expertise with a Libyan industrial platform, creating a potential mechanism for local capability development.
AFNIS INVESTMENT TAKEAWAY
The Tosyali SULB Benghazi project represents a potentially important shift in Libya’s industrial proposition: from an economy dominated by hydrocarbon extraction toward one capable of converting energy and geographic advantages into export-oriented industrial production.
Its significance extends beyond the headline US$2.5 billion investment. The more important question is whether Benghazi can become a competitive North African hub for lower-carbon iron and eventually steel. The project’s location, natural-gas availability, Mediterranean access and hydrogen-ready DRI technology provide several of the ingredients required.
The opportunity, however, is inseparable from execution and political risk. An export-heavy business model requires reliable infrastructure, competitive energy, efficient maritime logistics and stable access to international markets. The project’s progress toward its targeted early-2028 commercial start will therefore be a critical test.
For Africa, the broader lesson is significant: industrialisation does not necessarily require a country to possess every component of a value chain. It requires the ability to assemble energy, infrastructure, capital, technology and market access into a commercially viable platform.
Benghazi is attempting to do precisely that.
AFNIS PROJECT VERDICT
Classification: INDUSTRIALISATION CATALYST
The Tosyali SULB Benghazi DRI Complex qualifies as an Industrialisation Catalyst because it seeks to convert Libya’s energy and geographic advantages into a large-scale export-oriented iron platform while establishing a pathway toward lower-carbon steel production.
Its strategic test will be whether the project can translate its considerable planned capacity into competitive production, reliable exports and a broader domestic and regional steel ecosystem.