Outotec: No Decision to Leave Iran

"Considering the current condition of the country, the company announces that it has taken no decision to leave Iran and will do its best to find alternative solutions [to stay] in the case of sanctions' return," the company said in a statement sent to ME-Metals.

Outotec, which builds plants, makes equipment and offers services for the metal and mineral processing industries, has a long history in Iran and remained in the market after the US instituted sanctions against Tehran in 2010.

The company emphasized that Outotec stayed in the country both during the 1980-88 Iran-Iraq War and the sanctions period of 2011-14, when most other global technology firms abandoned Iran, Financial Tribune reported.

Outotec has conducted all operations in Iran directly and values its "hard-earned reputation" in the Iranian market, reads the statement.                 

This is while the company had told Reuters on May 17 that it expects order intake from Iran to slow after US President Donald Trump’s May 8 announcement to reimpose sanctions on Tehran.

CFO Jari Algars told Reuters by email that, if project financing was not available, future orders would decline.

“Reinstating the sanctions would not stop business, but it will complicate it and slow it down,” he said.

Asked if Outotec was considering leaving the market, Algars said it was “too early to say”.

During the sanctions, Outotec made the so-called “stop and go” deals in Iran, where it was paid in increments and delivered accordingly, he said.

The CFO noted that business started to normalize after the 2015 nuclear deal with Iran, helping Outotec to book orders from the National Iranian Copper Industries Company (NICICO) and Iran International Engineering Company (IRITEC).

Algars did not disclose the volume of Outotec’s business in Iran but said it did not represent a significant share of Outotec’s total global sales of about €1.2 billion.

“Deliveries already announced are proceeding as planned and Outotec expects to complete them in the near future,” he said.

NICICO’s order is for two sulfuric acid plants for copper smelters with a value of around €50 million while IRITEC ordered process technology, worth €45 million, for an iron ore beneficiation plant.

 Cooperation With Sangan Project

Outotec was awarded a contract by Shangdong Province Metallurgical Engineering Company, known as SDM, in 2016 for the delivery of process equipment to the Sangan Iron Concentrate Project in northeastern Iran. The Iranian Mines and Mining Industries Development and Renovation Organization owns the Sangan mines and SDM is their engineering partner. The contract value was put at approximately €10 million and the order was booked in Outotec’s 2016 second quarter order intake.

Outotec’s scope of work includes the design and delivery of thickeners and filter presses as well as related installation supervision and commissioning services, including spare parts, the Finnish firm’s website stated. 

“We are pleased to have been given the opportunity to deliver the main dewatering process equipment to the second phase of Sangan iron project. Our comprehensive portfolio of dewatering equipment enables us to tailor efficient and environmentally sound solutions and services for iron ore processing,” says Kalle Harkki, the head of Outotec’s Minerals Processing business unit at the time.

The Espoo-based Outotec was founded in 2006 with the aim of providing technologies and services for the metal and mineral processing industries. The firm concentrates on producing machines and methods that facilitate the various stages of extractive metallurgy and mineral processing from ore through to pure metal or mineral, including the grinding and physical separation of ores and the smelting and leaching of base and precious metals.

The company also provides engineering and after-sales services for its products.

Outotec spun off as a separate entity in June 2006 when the parent company decided to concentrate on its primary concern of stainless steel.

A listing on Helsinki Stock Exchange followed shortly afterwards and the company was promoted to the benchmark OMX Helsinki 25 as a result of the index’s February 2007 reclassification.