Economy, Business And Markets

Mining to Contribute 13t Rials to Budget

Mining to Contribute 13t Rials to BudgetMining to Contribute 13t Rials to Budget

The administration has proposed 13 trillion rials of royalty on minerals for the next Iranian calendar year’s budget, Mehdi Karbasian, the head of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), told Mehr News.

Karbasian said the royalty could help compensate the budget deficit caused by the falling price of crude oil which has been set to hover between 70 and 75 US dollars for the next year (to start March 21, 2015).

Karbasian, who is also the deputy minister for industry, mine, and trade, added that by December 21, the ministry will unveil the country’s comprehensive plan for steel. According to Karbasian, the plan is aimed at helping the industry achieve its 2025 goal of producing 52 million metric tons of steel per annum.

Despite the shortages in iron ore concentrate, iron ore pellet, and direct-reduced iron (DRI), this year’s steel production will reach 17 million metric tons. To confront the challenges in providing the iron ore pellet, as the key raw material to produce steel, Mobarakeh, Hormozgan, and Kaveh Pars steel companies have been tasked by the ministry to barter their steel products with iron ore pellets for the time being.

The issue of raw material has long been a concern in the country’s steel sector, as the minister for industry, mine, and trade recently raised the alarm about the shortage. Mohammad Reza Nematzadeh said the country needed to annually produce at least 6 million tons of iron ore pellets in order to meet domestic steel plants’ growing demand.

Based on the 20-Year Vision Plan, Iran should focus all its efforts to increase production of steel by overcoming the shortage in iron ore pellets and iron ore concentrate. If the administration is able to develop the infrastructure to produce the raw materials, the country then will not have to export a considerable portion of its iron ore, which would result in financial losses for the national economy.