A new report released by the Parliament’s Industries and Mining Commission estimates the country’s annual steel production capacity at about 14.5 to 16 million tons from the previously assumed 20 million tons.
According to the report, neglecting domestic capacities and resorting to excessive imports during 2009-13 prevented the steel industry from achieving self-sufficiency, Foolad News reported.
This is while objectives outlined in the 20-Year National Vision Plan (2005-25) and the fourth and fifth five-year development plans require the country to not only reach self-sufficiency in steel production but also to become a major steel exporter, reads the report.
Referring to the seven major national steel projects knowN as “Provincial Steel Plants”–introduced under the former administration, the report says the plants were located without conducting proper feasibility studies.
“Some of these projects such as Sabzevar and Qaenat were built in water-scarce areas, threatening to endanger farming and environment.
“Meanwhile, record high inflation over the past few years and delay in implementation of these projects have multiplied the costs,” it read.
The parliamentary report also indicates that while domestic steelmakers are faced with shortage of raw material for steel production such as iron ore pellet and sponge iron, the extracted iron ore is being exported in granulated form due to lack of sufficient pelletizing units.
In another section, the report notes that Khuzestan and Mobarakeh steel companies have failed to meet their earlier obligations in increasing production capacity.
Therefore, they should not be allowed to buy shares in the provincial steel projects as such undertakings would reduce their resources and consequently steel production capacities.
At the moment, Mobarakeh Steel Company is considered a potential buyer for Sefid Dasht Steel Plant in Chaharmahal-Bakhtiari Province and Khuzestan Steel Company is seeking to buy Shadegan Steel Company in Khuzestan Province.
