Economy, Business And Markets

Chinese Finance for Provincial Steel Projects

Chinese Finance for Provincial Steel Projects
Chinese Finance for Provincial Steel Projects

The deputy minister of industry, mine, and trade said he would negotiate with the Chinese over Miyaneh steel project in order to make it operational by next summer, reported Irna.

Mahdi Karbasian, who is also the head of Iranian mines and mining industries development and renovation organization (IMIDRO), said 65 % of Miyaneh steel project is owned by Amirkabir Steel Company and Bank Mellat, while 35% is owned by IMIDRO. He added that the negotiations with the Chinese are expected to accelerate the inauguration of the project.

The IMIDRO plays an effective role in establishing and supporting companies' progress in industry sector towards increasing competitive advantages in international markets.

The organization also seeks optimized development and exploitation of the country’s metal and non metal mining reserves, as well as renovation of mining industries.

Karbasian further said Ghaenat steel project in South Khorasan province as well as Sabzevar steel project in Khorasan Razavi province are also considered to have been implemented.

Karbasian emphasized that IMIDRO has managed to come to conclusions regarding how to finance the seven recent steel projects. Earlier, Sepid-dasht, Shadegan, Neyreez, and Miyaneh were activated through a 65% investment by the private sector.

"Provincial steel projects are the biggest projects currently managed by the ministry of industry, but they need to be financed", said Karbasian, adding that the Chinese are supposed to finance such projects.

The seven provincial steel projects -each with a production capacity of 800,000 tons of steel every year- were launched in 2006, but they were never finished due to budget deficits.

The current government is determined to implement such projects in order to move closer towards the country's 2025 Vision Plan. According to the strategic plan, the country, which is the world's 15th steel manufacturer, should annually produce up to 55 million tons of steel by 2025.

However, the amount must be reconsidered due to an ongoing water scarcity, Mohammadreza Bahraman, the head of mining committee at Iran Chamber of Commerce, Industries, Mines and Agriculture told Fooladnews on Wednesday.

"Regarding the robust demand of industries for water," Beharaman said, "it seems crucial to revise the attitudes and targets of our steel industry."

The official underlined the need to construct steel plants in areas where water scarcity is not a challenging problem.

The deputy industry minister, Jafar Sarqini, noted Monday that accomplishing the 55-milion-ton goal will need at least $45 billion of investment, out of which $20 billion should be directly spent on the steel industry and $25 billion on infrastructure and downstream or upstream industries.

Some steel experts believe production of more than 40 million tons of steel in the next 10 to 15 years is something beyond expectations, considering the current capacities in Iran, Fooladnews reported earlier this week.