Economy, Business And Markets

11 Trillion Rials Raised to Fund 7 Steel Projects

11 Trillion Rials Raised to Fund 7 Steel Projects11 Trillion Rials Raised to Fund 7 Steel Projects

Eleven trillion rials ($401.5 million based on official exchange rate) was raised over the past year to fund seven steel projects across the country, Fooladnews quoted the head of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) as saying.

“Among the projects are one in the northeastern province of Khorasan Razavi and another in the central Yazd province. There are also 4 direct-reduced iron (DRI) projects, which will come into operation within a year”, said Mehdi Karbasian.

Many steel projects have been delayed due to problems related to the letters of credit (LCs). But during the past few months, the administration has managed to solve the LC problem for seven provincial steel projects through negotiations between the Central Bank of Iran (CBI) and China, which accelerated the financing process.

The seven provincial steel projects reportedly increase the country’s steel output by 6 million metric tons per annum.

Responding to the question whether the mining budget will suffice for development purposes given the sharp decline in oil revenues, Karbasian, who is also the deputy minister of industry, mine, and trade, stated that it is the private sector and not the government that is expected to play a key role in the mining sector.

The deputy minister’s comments come as a member of the Iranian Steel Producers Association (ISPA) complained that the private sector has to produce steel in an unfair environment.

Private companies believe that financial and legal protections for state-owned steel companies prevent them from fair competition in domestic and international markets, IRNA cited Reza Shahrestani as saying.

“The government sector enjoys facilities and support from the government while the private sector has to cope with higher production costs”, complained Shahrestani, pointing to other factors which threaten the private sector steel manufacturers including slowdown in capital projects, steel price shocks, and dumping policies pursued by foreign competitors such as China.

The ISPA member urged the government to protect steel manufacturers by imposing high import tariffs on steel and steel products.