Economy, Business And Markets

Coal Mining: An Indispensable Part of Steel Industry

Coal Mining: An Indispensable Part of Steel Industry  Coal Mining: An Indispensable Part of Steel Industry

Steel industry is of utmost importance for Iran, as it is the main supplier to a range of vital sectors, including automotive and construction.

And the primary feedstock for keeping the steel mills ablaze is coal, which is used alongside iron ore to produce steel.

The black mineral’s role is even further highlighted when we consider Iran’s aim of becoming the world’s sixth largest steel producer by 2025, as per the objectives of the 20-Year National Vision Plan.

According to data compiled by Financial Tribune, the plan stipulates the production of 55 million tons of crude steel per year, which means blast furnace steel production capacity needs to increase to 6 million tons per year from the current 3.5 million tons. This requires the annual production of 3.2 million tons of coking coal and 4.5 million tons of coal concentrate.

Experts believe Iran’s coal concentrate output currently falls short of the target by more than 3 million tons, stressing the need for further development of the coal industry.

Iran’s coal reserves are estimated at over 5 billion tons, while proven reserves stand at about 630 million tons, according to the Ministry of Industries, Mining and Trade.

The provinces of North Khorasan, South Khorasan, East Azarbaijan, West Azarbaijan, Kerman, Mazandaran, Isfahan, Tehran and the mountainous regions along the Caspian Sea are rich in coal reserves. There are a total of about 180 coal mines in these provinces.

Tabas, located in South Khorasan Province, is home to more than half of Iran’s coals reserves, including 1.1 billion tons of coking coal in Parvardeh region and 1.4 billion tons of thermal coal in Mazino area. Tabas Parvardeh Coal Company is Iran’s largest coal producer, with an annual output of 5.1 million tons of unprocessed coal and 750,000 tons of coal concentrate.

The company was established in 2007 through a consortium made up of the Italian IRASCO and the Iranian engineering IRITEC companies. The consortium also constructed Iran’s largest coal preparation plant with a production capacity of 300 tons per hour.

The construction of another coal preparation plant also started recently by Central Alborz Coal Company with an investment of $12.8 million and is set to be completed by the end of September. The plant, located in Mazandaran Province, is capable of producing 500,000 tons of coal per year.

Coal preparation plant, also known as coal wash or handling plant, is a facility that washes coal of soil and rock, crushes it into chunks and prepares it for transportation to markets. The more advanced and efficient the plant is, the more of the waste material can be removed from the coal, lowering its total ash content and improving its market value.

New deposits of thermal and metallurgical coal estimated at more than 350 million tons were recently discovered in northern and central Iran (including the Tabas region), announced Iran Mineral Production and Supply Company, a subsidiary of the Iranian Mines and Mining Industries Development and Renovation Organization.

With the newly discovered deposits, TPCCO says its unprocessed coal and coal concentrate output capacities expand by 750,000 and 450,000 tons respectively.

The private sector, which accounts for one-third of coal extraction in Iran, is facing a multitude of problems, including lack of funds and modern techniques.

Despite great potential in the sector, these obstacles have pushed Iran to import huge quantities of coal from Australia and Indonesia among other countries in recent years. Over 2.5 billion tons of coal were imported in the last Iranian year (March 2015-16).