Economy, Business And Markets

Iron Ore Exports Up Amid Pellet Shortage

Iron Ore Exports Up Amid Pellet ShortageIron Ore Exports Up Amid Pellet Shortage

More than 1.16 million tons of iron ore worth $41.8 million were exported between June 22 and July 22, which marks the fourth Iranian month of Tir.

This indicates a 3.9% increase in terms of volume compared to the same period of last year and an 18% increase over the previous month, according to the Islamic Republic of Iran’s Customs Administration.

The increase in export of iron ore comes as the Iranian authorities have repeatedly sought to curb export of low value-added minerals, encouraging domestic industries to turn iron ore into iron pellets and concentrates which is required by domestic steel industries, Foolad News reported.

Observing that “export of raw iron ore is no longer viable due to high production costs and a drastic decline in the global prices of the mineral,” head of Iranian Mines and Mining Industries Development and Renovation Organization, Mehdi Karbasian, suggested expanding the production of iron pellets and concentrates to curb raw exports.

Explorations made in the 1960s estimated Iran’s iron ore reserves at about 5.1 billion tons, of which 2.8 billion tons are proven. But most of Iran’s iron ore is low grade and needs to be converted to pellets to be used by steelmakers.

Iran is targeting annual steel output of 55 million tons by 2025, up from about 16 million. However, lack of high-quality iron pellets has left the sector short of the required raw material to meet this objective.

Iran produced only 21 million tons of iron pellets last year while demand reached 28 to 29 million tons, according to head of International Affairs Department at the Iranian Iron Ore Producers and Exporters Association, Keyvan Jafari Tehrani.

India’s Steel Ministry undertaking KIOCL is currently in negotiations to sell high-quality iron pellets to Iran in what could be a $200 million annual deal, to meet the substantial local demand.

KIOCL is to initially buy 80,000 tons of high-grade concentrate containing 67 percent iron from Anglo America’s Brazil operations by September, convert it into pellets and then sell to Iran for about 500 million rupees ($7.8 million), KIOCL Chairman Malay Chatterjee told business-standard.