The National reported that the project will move ahead as soon as the Abu Dhabi Government hands the steel maker the gas allocation for the energy intensive facility, which will increase the company's output by almost a third.
Mr Saeed Al Romaithi CEO of Emirates Steel said that "We are ready to award the project, but we want the gas to be allocated by the Government. Once this happens, we will go ahead."
The new plant will be a significant boost to the Khalifa Industrial Zone, known as Kizad. The huge zone and its accompanying harbour were inaugurated last year and are key to Abu Dhabi's efforts to diversify its economy away from hydrocarbons.
Kizad's only big tenant so far is Emirates Aluminium whose smelter was active even before the zone was completed. It is hoped that large scale producers such as Emal and Emirates Steel attract downstream industries that turn basic metals into more complex products.
The state owned company issued a tender for the steel mill in September 2011. According to the Middle East Economic Digest the Italian contractor Mr Danieli submitted the lowest bid for the construction of the facility the following June and is the preferred bidder for the plant's construction.
The construction period will last about 30 months, Mr Suhail Al Ameri, the company chairman, said when the tender was announced.