(Minews) - Iran is advancing a massive steelmaking project being promoted as the country’s “South Pars” of the steel industry.
Sangan, the biggest industrial project in Iran’s east, will produce 17.5 million metric tons of iron ore concentrates and 15 million tons of pellets a year.
An initial investment of $2 billion is planned in Sangan which is estimated to hold 1.2 billion metric tons of iron ore.
Deputy Minister of Industry, Mine and Trade Mehdi Karbasian says further discoveries are expected to increase its reserves by 50-100% given “many promising signs which we have seen”.
For both concentration and pelletizing, nine production units have been designed which will lead to a transformational change in the regional economy and bring about development and employment to the local residents, he said.
Sangan, near the border with Afghanistan in Iran’s Khorasan Razavi province, is an underdeveloped backcountry. It is already seeing development rolling on its way, as new roads are being paved, a rail track is laid and water brought to its doorsteps.
Karbasian said the project will create a robust downstream chain in Sangan where “the soil will find added value and turn into the dollar”.
Some of the purchases for the plants have been made from Italian foundry equipment maker Danieli SpA before the Europeans intensified sanctions on Iran.
For now, five domestic consortiums and another consortium comprised of two Chinese and four Iranian firms have undertaken to provide investment.
Iran’s biggest mill, also the Middle East’s largest, is currently Mobarakeh Steel Company which produces 7.2 million metric tons of steel per year.
There are also several private steel plants, each under 100,000-ton capacity, scattered around the country.
Iran plans to quadruple production to 55 million tons a year by 2025 to keep pace with demand in its industry and an economy being billed as one of the emerging Next Eleven.
Steel is a strategic commodity for the country of about 80 million. It is crucial to Iran’s massive oil and gas industry, automotive sector which the Middle East’s largest as well as transportation and water supply networks, urban centers and a mammoth construction sector and its employment.
Karbasian said Iran is currently the world’s 10th country in terms of mineral deposits but the country can improve its ranking on the table with more discoveries as many fields have never been examined.
“To put it into perspective, discoveries have been made only on 100,000 km of the country’s 1.6 million km mineral fields,” he said.
“Iran’s is among the top countries in terms of gas and oil reserves; while those reserves are running out, the Sangan iron ore mine is being described as the second Assaluyeh which contains many job opportunities and unique potentials for foreign exchange earning and development,” Karbasian added.
