Economy, Business And Markets

Deputy Minister Unveils 10 Mining, Mineral Projects

Deputy Minister Unveils 10 Mining, Mineral ProjectsDeputy Minister Unveils 10 Mining, Mineral Projects

Deputy minister of industry, mine, and trade Mehdi Karbasian has unveiled ten major projects in the mining and mineral industry, which are scheduled to become operational within the current Iranian calendar year (started March 21), saying  $372 million has been provided in funding for the projects so far, IRNA reported.

“Sponge iron facilities in three steel plants, an antimony facility in the southeastern Sistan and Baluchestan Province, and doubling the capacity of the pier in the Persian Gulf Special Economic, Industrial, and Mining Zone are among the projects to be implemented this year,” said Karbasian, who is also the chairman of executive board at the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), in a presser held on Wednesday.

Another project is the South Aluminum Complex in Fars Province's Lamerd. The aluminum facility will be developed in several phases in the course of 3.5 years to produce 300,000 metric tons of ingots annually. There are currently three major aluminum producers in the country including Iralco in the central Markazi Province as well as Almahdi and Hormozan in the coastal province of Hormozgan. The three have a combined production capacity of 400,000 tons per annum.

At the presser, Karbasian also referred to the National 2025 Vision Plan based on which the industrial sector is expected to annually produce 1.5 million tons of aluminum per year.

Also in line with the Vision Plan is the implementation of the so-called 'Seven Provincial Steel Projects'. The plan envisions an annual 55-million-ton crude steel output by the next decade. This is while by the end of the 6th Five-Year Economic Development Plan (2016-2021), the steel production capacity should reach 40 million tons from the current 22 million, the IMIDRO chief noted.

The seven steel projects had been suspended since 2006 due to funding problems but the incumbent administration revived them 18 months ago. Three out of seven will produce sponge iron (technically known as direct-reduced iron or DRI) this Iranian year as the prerequisite to steel production. China had pledged to finance the projects through Iranian assets in China, however the financing has been delayed for a long time until recently before the IMIDRO convinced the Chinese side to accelerate the funding process. Last week the first tranche of the fund was deposited. Officials say the equipment and machinery for the steel plants are either Chinese or European and the plants will fully operate within the next three years.    

Karbasian went on to say that the steel plants’ shares will be sold to the private sector based on prices set by judiciary experts. The IMIDRO will maintain a share of between 20% and 35% in each project, while the private sector will be able to own the rest.

"IMIDRO will lend its backing to anyone who wishes to invest in the mining and mineral industry sector," he remarked.

Nonetheless, one serious stumbling block in the way of new investments is the issue of mining royalties and usufructs. The parliament and the administration decided last year to increase the royalties, government rights and the mining usufruct to 25%. However, according to Karbasian, the industry ministry has agreed to revise the decision to decrease the royalties. He also says the ministry is ready to help major iron ore mines to pay off their royalty debts.

During the presser, the deputy industry minister also highlighted the ministry’s determination to end sales of unprocessed minerals within the next two years. “By the next 22 months, new iron ore concentrate and iron ore pellet facilities will start production and the mining sector will not have to export raw minerals because the entire mineral production will be domestically consumed,” Karbasian noted.

Tehran will be hosting an international mining conference on May 31. The 2-day Iran Mines and Mining Industries Summit will be held in collaboration with 284 domestic firms and will focus on mining and its role in development and employment.