Libya’s civil war holds a plethora of factions vying for control, but it is broadly characterised by the rivalry between Libya’s two largest cities: Benghazi in the East and Tripoli in the West. These host the Libyan National Army (LNA) and the Government of National Unity (GNU) respectively. Libya’s intense history of conflict slowed over the last decade. In 2017, the LNA, led by Khalifa Haftar, declared Benghazi liberated from Islamic State influence, and by 2020 the civil war between east and west had officially resolved. Nonetheless, violence still mars both cities through a subsequent set of inconsistent east-west dialogue, economic disparities, and political instability.
The desire to resolve the tension carries international weight, with Mediterranean states relying on Libyan oil and Middle Eastern partners seeking a stabilized northern Africa. The United States has been involved as well, sending Massad Boulos, President Trump’s Africa and Middle East envoy, to Libya multiple times to build unified governance, support military integration, and improve the entire national economy. These international observers know that one of the main mechanisms for building sustainable peace and calming the existing tensions will be to build economic capacity and resilience. Thus, Boulos’ diplomacy resulted in a $235 million infrastructure agreement between Libya’s Mellitah Oil & Gas Company and US-based Hill International, and a proposal for a $70 billion investment package from Prime Minister Dbeibah in Tripoli. Oil infrastructure, however, only focuses on a primarily extractive and export-driven industrial sector.
One breakthrough for peace-building occurred in April when the two governments agreed on a unified budget. This helped to resolve some of the economic crises in the region, such as oil shortages and volatile inflation; however, real economic growth needs to follow. Business growth, job creation, and foreign direct investment must occur simultaneously in both east and west, building out more than only one sector. In oil-rich eastern Libya, investments have mostly focused on oil refineries and export infrastructure; however, for productive peacebuilding through economic growth, this pattern needs to change. One project, the Tosyalı-SULB, aims to remake Benghazi’s economy by focusing on value-added steel based on local production.
The chairman of Libya United Steel Company for Iron and Steel Industry (SULB), Ahmed Gadalla, announced the agreement with Tosyalı in 2024, envisioning the world’s largest direct reduced iron complex. Mr. Gadalla noted the importance for the region, saying: “We are delighted and proud to make a crucial step towards Benghazi, Libya’s industrialization and the development of the steel industry.” Beyond Benghazi, Gadalla believes that the project will advance the economic ties between Libya, Turkey, and many other Mediterranean neighbours. The plant will produce hot briquetted iron, a primary intermediate product used for green steel and needed most in green energy projects.
Once at its max capacity, the facility can operate using hydrogen, supplying greenhouse gas-free steel, ideal for the European market’s environmental and economic goals. Furthermore, for uniting Libya, the Tosyalı-SULB plant will directly support over 7,000 jobs, produce more than 7.5 million tons of steel each year, and diversify the country’s exports away from oil. The project helps Libyan industry, and in so doing it will help the cause for peace. This is Ahmed Gadalla’s hope: that anchoring heavy industry in Libya will build up the nation as a whole, from Tripoli to Benghazi. The plant will retain value, technology, and employment inside Libya, creating internal commerce that will empower Libyans to work together and actualize the need for peace. Furthermore, the Tosyalı-SULB plant will add intermediary value along global value chains, integrating the Libyan market into foreign economies, rather than simply exporting raw resources.
This direct-reduced iron plant symbolizes a movement towards North African geopolitical agency in the midst of peacebuilding. The United States and others are actively involved in fostering dialogue between the GNU and LNA, but substantiating agreement will require changes in the underlying socioeconomic structures. Investments that create jobs and encourage domestic revitalization will directly move Libya towards lasting peace.
In April 2026, the United States AFRICOM sponsored military exercises, dubbed “Flintlock”, across the Sahel, which were aimed at countering Russian influence in the region. The operation included regional security cooperation in Libya, showcasing Libya’s desire to become a reliable regional partner. With economic growth backing internal unity, Libya could become a player in stabilizing the broader region, especially in places like Sudan. Those, like Envoy Massad Boulos, who hope to bring peace to Sudan, are recognizing Libya’s important role. A role which will be viable when Libyan industry grows and when the markets unite the opposing sides. Ahmed Gadalla’s belief that the Tosyalı-SULB plant will foster peace will be true when other projects like it similarly begin to root industry and employment in Libya.
