Economy, Business And Markets

Gov’t Plans to Help Boost Steel Industry

Gov’t Plans to Help Boost Steel Industry    Gov’t Plans to Help Boost Steel Industry

The shortage of iron ore will cause a serious crisis for the steel sector in the future if the Balance Plan for steel continues to be ignored, said Mehdi Karbasian, the managing director of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), Fooladnews reported.

Karbasian, who is also the deputy minister of industry, mine, and trade, warned of numerous fundamental problems in 2025 (the end of 20-year Vision Plan) if officials in the steel industry do not properly implement the Balance Plan, which requires an extensive exploration of iron ore mines across the country.

Based on the 2025 Vision Plan, the country should be able to produce at least 52 million metric tons of crude steels every year, while the current production is said to be around 18 million metric tons per annum.

According to Karbasian, an important meeting is scheduled to be held tomorrow to be attended by the industry minister, Mohammadreza Nematzadeh, in which the strategic Balance Plan for Steel will be discussed. The Balance Plan is mainly aimed at achieving a proper balance in iron ore, iron ore concentrate, iron ore pellet, and direct reduced iron (DRI).

A serious challenge faced by the producers of iron ore concentrate and iron ore pellet in the country is the lack of financial resources. Experts in the steel sector assert that cheap and suitable foreign finance is the key to resolve the problem. They say that Iran’s two main sources of revenue, namely oil and gas and taxes, are not enough to finance all the steel projects, especially under the current circumstances when oil exports is limited due to international anti-Iran sanctions.

The abundant supply of iron ore and coal together with the low energy prices and the availability of expert staff are among the strong points of the domestic steel sector. The combination makes steel industry an attractive field for investment. But an effective strategy to balance all the different parts of steel production chain is what the steel sector has been missing for years. The word chain best describes the steel production process, where a missing ring could dramatically disturb the sustainable production of the strategic metal.

According to Karbasian, the whole production chain should be taken care of simultaneously, including the exploration of new iron ore mines, extraction projects, processing of the ore into iron ore concentrate, pelletizing, and developing coke manufacturing units. In addition, the location of steel plants is also of great importance, as during the past few years, many steel plants were built in locations with limited access to water resources.

Adding to this situation was the absence of a clear national strategy and roadmap, which brought disastrous consequences in the steel industry during the eight years of Mahmoud Ahmadinejad’s presidency.