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New Chapter in Mineral Ties With Kazakhstan
Economy, Business And Markets

New Chapter in Mineral Ties With Kazakhstan

Iran is planning to increase crude steel production using raw materials supplied by iron ore resources in Kazakhstan, Fooladnews quoted Mehdi Karbasian, deputy minister of industry, mine and trade as saying.
“The two countries agreed to develop cooperation in the mining industry through joint projects on zinc, bauxite, and iron ore. A joint mineral company will be formed to produce iron ore concentrate and iron ore pellet in Kazakhstan and then we will be able to transport the raw material to Iran and produce steel in the north”, said Karbasian, who is also the head of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), after his visit to the Central Asian country last week as part of a delegation headed by the foreign minister.
Calling Kazakhstan a mineral-rich country, the IMIDRO chief also noted that both sides are willing to implement the initial mineral agreement signed late last Iranian year (in March). He added that the agreement will be officially signed in an October visit to Iran by the Kazakh President Nursultan Nazarbayev.
“The joint mineral company will first start investing in Kazakhstan’s iron ore and zinc mines. The CIS country enjoys huge reserves of iron ore and the country also has appropriate infrastructure, such as good railway network, which will enable us to easily transport the raw material to our country to produce steel”, Karbasian said.
Considering the serious shortages in the steel industry in terms of raw material, which might hinder the development in the sector and prevent the country from producing the targeted 55 million metric tons of crude steel by 2025, the industry ministry is studying several solutions including investment in mineral industries in countries such as Kazakhstan and Afghanistan.

 Crude Steel Output Up
In an attempt to meet the requirements of the 2025 Vision Plan, officials are resorting to all means to increase the domestic production of steel and maintain an annual production growth of at least 15%. Based on the latest statistics, the crude steel output over the past Iranian calendar year 1393 (ended March 20) hit 16.8 million tons, 7.4% up from a year earlier. During the 12-month period, steelmakers produced 16.8 million tons of steel ingots, compared to 15.64 million tons produced in the preceding year, and 14.37 tons a year before. The 7.4% annual steel production growth last year comes as the figure stood at 8.8% two years ago.
Last year, Mobarakeh Steel Company was the major steel producer, making 5.48 million tons of crude, followed by Khouzestan Steel Company (KSC) and Esfahan Steel Company (ESC). The eight major steel producers also managed to produce 16.87 million tons of steel products including rebars (reinforcing bars), steel sheets, and structural steels, which indicates a 2% increase compared to the preceding year.
In addition to the measures the administration is taking to efficiently supply the raw materials required by the steel producers, it is also adopting regulatory policies aimed at protecting domestic steelmakers against the dumping policies some countries are pursuing in the international markets. More than a month ago, the cabinet set protective tariffs on import of steel. Import tariffs were increased to 10% for steel ingots, 15% for steel sheets and 20% for rebars and iron beams. Less than two months after the imposition of new tariffs, domestic steel manufacturers are after further increase in tariffs, saying Chinese steel ingot is offered at $320 per ton, while the production cost inside the country is higher than that. “We have submitted a proposal based on which a further increase in steel import tariffs will be considered by the industry ministry,” said Ardeshir Sa’ad Mohammadi, managing director of the ESC. Apart from dumping threat posed by Chinese steel products, the recent decline in ruble value caused by anti-Russia sanctions has pushed CIS steelmakers to reduce prices. “This is yet another threat to domestic producers,” added Sa’ad Mohammadi.

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