Economy, Business And Markets

Gov’t Determined to Complete Steel Projects

Gov’t Determined to Complete Steel ProjectsGov’t Determined to Complete Steel Projects

The administration would not tolerate any delays in the implementation of major steel projects across the country, said the minister of industry, mine and trade during his visit to a steel project in the eastern city of Ghayen.

Mohammadreza Nematzadeh said the equipment and the machinery needed for Ghayenat and another six major steel projects should be supplied domestically and if that is not possible, the ministry will lend its support in order for the strategic projects to complete as fast as possible.

The seven provincial steel projects are the biggest projects currently managed by the ministry of industry, but according to the previous agreements, the projects need to be financed by the Chinese companies. The provincial steel projects – each with a production capacity of 800,000 metric 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 20-Year Vision Plan (2025). According to the strategic plan, Iran, which is the world's 15th largest steel manufacturer, should annually produce up to 55 million metric tons of steel by 2025.

During the visit to Ghayenat Steel Project, Mehdi Karbasian, the deputy minister of industry, and also the head of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), said Ghayenat Steel Project has an 80% progress in its reduction section and around 33% in steel-making section. Karbasian added that the project was delayed due to problems related to the letters of credit (LCs), but stressed that the Central Bank of Iran (CBI) and the Chinese side are negotiating to find ways to resolve the problems and accelerate the financing process.

The Iran-China Chamber of Commerce recently announced that the Chinese finance, which had been stopped for a while, would soon continue. The chamber also added that China has agreed to finance capital and industrial projects in Iran with the total value of up to $44 billion, twice the amount the country owes Iran, reported Tasnim news agency on Friday. According to Karbasian, LCs have been opened for six out of the seven provincial steel projects and the LC for the remaining one will be opened within the next 15 days.

Along with the provincial steel projects, the Rouhani administration has approved plans to produce 10 more million metric tons of steel per annum in steel plants along the southern coasts. Access to large amounts of water, strategic location, proximity to seaportS, and the future connection of Iran's railway to Afghanistan and Pakistan are among the biggest advantages of producing steel in coastal areas.

Steel sector experts believe the main challenge faced by the country's steel industry is a lack of proper planning, particularly over the past decade. The previous government approved many steel projects in locations with no access to sufficient water resources.