A $30 billion investment gap in Iranian steel
Release Date:2018-11-22       Number of hits:1027       

According to the Iranian "Financial Tribune" reported on April 10, Meihedi·qiabasian, chairman of the Mining Innovation and Development Organization of the Iranian Ministry of Industry and Mines, published the media on the development of Iranian mining in the four years under the current government.
The Mining Innovation and Development Organization was established in 2002 to promote the development of the Iranian mining industry, increase national revenue, and reduce the economy's dependence on oil exports. According to Qiabasian, Iran currently ranks 15th in the world in proven mineral reserves and has 7 % of the world's mineral reserves, with a total value of more than 700 billion U.S. dollars. He also believes that with continuous exploration, Iran's actual mineral reserves should rank among the top 10 in the world. Since the Luhani government took office in 2013, the mining industry in Iran, especially key minerals such as iron concentrate, pellets, direct reduction iron and copper cathode, has nearly doubled.
According to the Iranian Ministry of Industry and Mine Trade, the amount of copper cathode mining increased from 254,000 tons per year to 469,000 tons, an increase of 45.8 %. The annual mining volume of iron concentrate increased from 28 million tons to 44.5 million tons, an increase of 37 % year-on-year. The annual mining volume of pellets increased to 34.5 million tons, an increase of 37.6 % year-on-year. The annual mining volume of direct reduction iron increased to 27.7 million tons, an increase of 32.4 % year-on-year.
The Iranian steel industry has developed rapidly, and the annual production capacity of crude steel has reached 31 million tons, an increase of 24.1 % year-on-year; The annual capacity of steel has been raised to 39 million tons, an increase of 20.5 % year-on-year. According to data released by the World Iron and Steel Association, Iran's actual crude steel production in 2016 was 17.89 million tons. According to Iran's current 20-year plan(2005-2025), Iran will become the sixth largest steel producer in the world by the end of 2025, and the annual output of steel will reach 55 million tons, of which 20-25 million tons will be used for export. In order to achieve this goal, Iran's direct reduction of iron production should reach 53 million tons per year, 80 million tons per year, and 87 million tons of iron ore per year. According to the Iranian media, Fooladnews believes that in order to achieve the above-mentioned increase in production targets, Iran needs another US$ 2.4 billion, US$ 1.87 billion and US$ 1.34 billion in foreign investment in the above three industries, respectively. These investments have now reached 52.5 %, 30 % and 100 %, respectively. Other areas of Iranian mining, such as aluminum, have not developed significantly in the past four years. It is undeniable that, apart from the rapid development of the steel industry due to government support, other mining industries are still suffering from severe recession and lack of funds.
President Qiabasian said that the solution to this problem depends mainly on foreign investment. At present, the Iranian mining industry needs nearly $50 billion in foreign investment to rejuvenate, including $30 billion in steel and other industries such as copper and aluminum. At present, some Asian and European countries have expressed interest in returning to Iran's mining market after the conclusion of the Iranian nuclear agreement. However, U.S. financial sanctions are still in place, and bank remittances remain blocked, which has deterred most foreign investors from investing in Iran.