Economy, Business And Markets

Aluminum Industry

Aluminum Industry
Aluminum Industry

The Majlis Research Center has published a report on aluminum consumption and production in the country, pointing out the hurdles to the development of Iran's aluminum industry.

According to the report, Iran's aluminum production capacity amounts to 457,000 tons, largely thanks to Iralco (175,000 tons), Hormozal (147,000 tons) and Almahdi (110,000 tons) manufacturing companies. Iran ranks 18th in the world in terms of the capacity of aluminum production.

Iranian manufacturers have produced different types of aluminum bars via traditional and the more recent environment-friendly technologies. Hormozal Co. has mainly contributed to the production of Aluminum in Iran from 2009 onwards. Furthermore, the country saw a -13.1 growth in terms of aluminum production over that period.

Bauxite, the main material for the production of aluminum, is scarce in Iran. The accessible reserves of the country's biggest bauxite mine in the city of Jajrom in North Khorasan are estimated at less than 20 million tons, whereas other bauxite resources in the country account for 5 million tons in aggregate.

On par with increasing demand and consumption of aluminum in the world, several countries such as Australia, India and a number of African nations including Guinea have embarked on acquiring the extraction rights of bauxite mines around the world.

To that end, Iran has secured the rights to exploit the world's richest bauxite mine in Guinea with an estimated reserve of 600 million tons. The deal has given Iran a huge strategic and competitive advantage in the aluminum industry.

But according to the Iranian Mines & Mining Industries Development & Renovation Company (IMIDRO), Iran needs a $400-500 million investment to start exploiting the Guinea mine.

Sustainable Electricity

The report also suggests that the shortage of sustainable electricity is one of the serious challenges facing aluminum industry. Aluminum manufacturing factories need separate power plants to keep the production going.

Under the most advanced technologies, the production of one kilogram of aluminum takes 11 kilowatt hours of electricity, 4 kilowatt hours below the global average. But the report asserts that Iranian manufacturers consume 17 kilowatts for one kilogram of aluminum.

The figures underline the importance of optimizing the energy consumption in aluminum manufacturing units and the need for new electricity resources with high efficiency.

Lack of Knowledge

Unfamiliarity of Iranian officials and decision-makers about the aluminum industry further delays the growth and development of this highly important sector, leading to the concession of numerous opportunities to the Persian Gulf neighbors, according to the report.

The production of aluminum in Iran gives the country comparative advantage, especially considering the fact that Iran possesses the richest gas reserves in the world. The conversion of every 9 thousand cubic meters of natural gas to aluminum makes the export of solid energy possible.

Iran's gas rivals strive to dampen the country's exports, whereas the export of solid energy can bring in higher added value and contribute to the development of the country's economy and employment.

Iran has embarked on manufacturing aluminum as a strategic metal with an annual production capacity of 475,000 tons. But failing to adopt the latest technologies, not exploring new local bauxite resources and exploiting bauxite mines in other countries have virtually jeopardized the future of aluminum industry in Iran.