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Iran’s Untapped Potential for Magnesium Production

Iran has access to magnesite and dolomite as the two main sources of magnesium in mines, notably in the provinces of East and West Azarbaijan, Hamedan, Kermanshah, Fars, Kerman, Semnan and Sistan-Baluchestan
Iran’s first and only industrial magnesium plant was established in South Khorasan Province in 2014.Iran’s first and only industrial magnesium plant was established in South Khorasan Province in 2014.
As an energy powerhouse, Iran can potentially become a competitive producer of magnesium on the global stage, considering that the commodity’s production cost is mostly based on energy costs

Global demand for magnesium as a light metal used in automotive and aerospace industries is on the rise, with some calling it the “metal of the future”.

Despite its sizable reserves, Iran currently has little share of this future.

Magnesium is found in large deposits of magnesite, dolomite and other minerals, and in mineral waters where magnesium ions are soluble.

Iran has access to magnesite and dolomite as the two main sources of magnesium in mines, notably in the provinces of East and West Azarbaijan, Hamedan, Kermanshah, Fars, Kerman, Semnan and Sistan-Baluchestan, a recent report by Majlis Research Center (the research arm of the parliament) said.

Magnesium is the ninth most abundant element in the universe, and the fourth most common in the Earth. Its metal form is also the third most commonly used structural metal, following iron and aluminum.

The main applications of magnesium include in the production of aluminum alloys, die-casting (alloyed with zinc), removing sulfur in the production of iron and steel, and production of titanium.

Magnesium is used in super-strong, lightweight materials and alloys. For example, when infused with silicon carbide nanoparticles, it has extremely high specific strength.

The metal has also been used in the automotive industry, with big names such as Mercedes-Benz, Porsche, Volkswagen, Mitsubishi, BMW and Chevrolet utilizing it in their engines and car bodies.

Because of its low weight and good mechanical and electrical properties, magnesium is widely used in the manufacturing of mobile phones, laptop and tablet computers, cameras and other electronic components.

China is currently the world’s largest producer of the metal, accounting for 85% of the global 1-million-ton output. But it is slowly stepping back on output due to environmental concerns as it utilizes coal.

The industrial goliath’s retreat would be an opportunity for new producers, including Iran, especially considering that the Middle East and North Africa market’s demand for magnesium is rising over increased use in steel and aluminum industries.

Global demand for magnesium is forecast to reach over 1.2 million tons by 2020, according to a research by United States Council for Automotive Research.

 Competitive Advantages

Iran’s advantages in magnesium production, namely large reserves, cheap and abundant energy resources and workforce, have long been identified but never adequately capitalized.

The country’s first and only industrial magnesium plant was established in Ferdows County of South Khorasan Province in 2014 using private investment and indigenous technology. Its annual output capacity stands at 6,000 tons, only half of which is utilized. It exports most of its output primarily to Germany and the Czech Republic due to limited local demand.

Iran’s annual demand for magnesium stands at close to 1,000 tons, with imports standing at 918 tons, according to Islamic Republic of Iran Customs Administration’s data for the previous fiscal year (March 2016-17).

With the expansion of country’s automotive and aluminum industries, Iran’s magnesium demand is forecast to reach more than 4,000 tons per year by 2020. Expanding production will also enable Iranian plants to cash in on Europe and Persian Gulf littoral states’ aggregate 250,000-ton annual demand for the material.

This is while Iran, as the largest automaker in the MENA region, is better situated to produce and use magnesium compared to aluminum, one of the primary materials used in the automotive industry.

Magnesium is 30% lighter compared to aluminum, easier to produce, less pollutant due to utilizing natural gas, and its raw material (dolomite) is cheaper and more abundant compared to aluminum’s scarce and costly bauxite.

As an energy powerhouse, Iran can potentially become a competitive producer of magnesium on the global stage, considering that the commodity’s production cost is mostly based on energy costs.

Iran’s cheap workforce can be another boon for the industry, as labor expenses are about $1.2 per hour, compared to China’s $2.5 and Turkey’s $5.3.

For producing each ton of magnesium, 3,500 cubic meters of gas, 2,700 kilowatt per hour of electricity, 15 cubic meters of water, 12 tons of dolomite and 1.2 tons of ferrosilicone are required.

Iran checks all the boxes in terms of potential for competitiveness and can be a force to be reckoned with in the global market.

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