Economy, Business And Markets

Raw Mineral Exports Dogged by Controversy

Raw Mineral Exports Dogged by ControversyRaw Mineral Exports Dogged by Controversy

Export of raw minerals has for long been the subject of heated debates among state authorities, parliamentarians and miners.

Lawmakers consider the export of any form of iron ore–the main mineral under scrutiny–as an instance of raw material sales, arguing that it deprives the economy of a considerable amount of value added.

They consider preventing the export of raw minerals necessary for meeting the objective of producing at least 55 million tons of steel by 2025, as per the 2025 Vision Plan. The ambitious goal requires the mining sector to produce at least 80 million tons of iron ore concentrates and pellets annually, SAMT daily reported.

Miners, however, contend that each stage of processing low-grade iron ore creates a certain degree of value added. They do not consider it economical, especially for smaller mines, to process minerals, in view of the inadequate infrastructure.

“No mineral is immediately usable following extraction, as it has to undergo several processes before it can be used in any industry,” says managing director of Chadormalu Mining and Industrial Company, Mohammad Nourian.

“No one would pay for a lump of iron ore.”

According to Nourian, copper, zinc, iron ore and coal are always extracted with a high volume of soil and overburden as well as gangue, which are commercially worthless and must be removed or minimized.

The mined iron ore contains lumps of varying sizes that must undergo a lengthy process of crushing and sintering before they are ready for concentration and upgrade to a certain degree of purity.

“In order to be used in the steel industry, iron ore must reach a purity level of 67%,” he said, adding that anything lower than 62% is worthless for the steel industry.

Nourian referred to extra costs incurred by some miners and cited the example of Chadormalu where the iron ore comes with a high content of phosphorous, the removal of which adds an additional stage to mineral processing and increases the production costs.

Other factors such as the mine’s location and transportation costs also affect the end prices and consequently the profitability of the mine.