Economy, Business And Markets

Steel Plant Expansion to Add 3MT to Capacity

Steel Plant Expansion to Add 3MT to CapacitySteel Plant Expansion to Add 3MT to Capacity

The sponge iron production unit of Chabahar Steel Plant will become operational by September next year, IRNA quoted deputy industry minister and director of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), Mehdi Karbasian, as saying on Sunday.

The plant has an annual production capacity of 1.6 million tons of crude steel. Sponge iron (technically known as direct-reduced iron or DRI), is the main raw material for producing crude steel. The new sponge iron unit is expected to add 3 million metric tons to crude steel production capacity in Chabahar port city, located in the southeast of Iran.

“IMIDRO has put the project out to tender and the winners will soon be announced,” said Karbasian.  

Chabahar steel plant’s construction was planned in line with a national project to develop the steel industry in coastal areas where abundant water, necessary for steel mills, is available. In addition, Chabahar has unique access to international waters, making it a strategic port for exports.

 Chabahar Port to Help Afghans Export Minerals

Negotiations have been going on between Iran, India and Afghanistan for using the port of Chabahar. After a decade of trilateral negotiations, the three countries agreed to sign a deal to use Chabahar port as an export platform, according to Afghanistan’s foreign ministry spokesman, Janan Mosazai, Eghtesadnews reported.

As Afghanistan has no access to ocean, Chabahar is an ideal port for Afghans to export their minerals. Afghanistan has rich minerals and the explored mines in the country – including iron ore, copper, niobium, cobalt, molybdenum, and lithium – are worth $850 billion, said IMIDRO deputy director, Amir Khorrami-Shad.

With proper investment in Afghanistan’s mines and the mining industries, as much as $5 billion worth of minerals could be exported from Afghanistan through Chabahar port annually, said the official.

IMIDRO says it is ready to export its engineering services to the eastern neighbor to help explore and extract the mines. The organization is also willing to invest in setting up mineral processing units in the eastern provinces of Iran, adjacent to the border with Afghanistan. The move, according to Khorrami-Shad, will help develop the eastern provinces.

“Establishing mineral processing plants near the Afghan border would help boost the regions’ economies and generate employment for people. Processing the minerals extracted in Afghanistan before exporting them through Chabahar port, will add more value to these products,” said Khorrami-Shad.

Afghan officials have reached agreements with an Indian company to extract iron ore in Hajigak mine, 100 km west of Kabul. The mine is considered to be Asia’s largest untapped iron ore deposit, holding 1.8 billion metric tons of iron ore. The Indian company is planning to build a steel mill with annual production capacity of 1.5 million tons.

One of the few unsolved issues between Kabul and New Delhi is the transportation of iron ore. The possible trilateral agreement over the use of Chabahar port would help resolve the issue.