Iran Eyes Development of Non-Ferrous Industries

EghtesadfOnline: Non-ferrous metals and mining industries in Iran have remained relatively underrated, considering their notable share of non-oil exports—a major focus for the country, especially in view of the reimposition of US sanctions.

News ID: ۷۴۶۰۷۸

03 October 2018

Donya-e-Eqtesad Media Group, Financial Tribune’s parent company, is holding a first-of-its-kind two-day Iran Non-Ferrous Industries Market and Related Technologies Conference and Expo in Tehran on Tuesday, with state and private sector players in attendance.

The main aim of the event is to direct more attention to the vital industries against the backdrop of a chaotic currency market that has taken the center-stage in the past few months.

> Major Challenges

The confab, held in the IRIB Conference Center, was inaugurated by Alireza Bakhtiari, the CEO of the media group and an industry player, who first referred to major challenges facing the industries.

He referred to water shortage, environmental issues, limited foreign investments, lackluster government consideration, private sector limitations and unilateral foreign sanctions as some of the challenges.

“But the main point is not the existence of these challenges, rather the different weights of these challenges in the minds of policymakers, non-ferrous industry players and industry development pundits,” he told the gathering.

“This makes focusing adequately on priorities more difficult."

Bakhtiari noted that the conference wishes to strike a state of unison in the thought processes of the main stakeholders of the industries.

Attended by about 30 major local firms and 10 international companies in addition to the main authorities of the industries and experts from Germany, Italy, France, Finland, Spain, Australia, India, Georgia and Turkey, the conference is slated to become a tour de force on the regional scale.

> Vast Potential

Bakhtiari was followed by Mohammad Abka, CEO of Foolad Technic International Engineering Company, who mainly tried to emphasize the vast potential in the non-ferrous metal industries.

“For instance, we exported 58,000 tons of lead in 2017, whereas our true potential (capacity) was 110,000 tons,” he said. “We exported 136,000 tons of copper, while we could ship up to 456,000 tons”.

He pointed out that the efficiency of the industries, in relation to their workforce, is only a fraction of that witnessed at the global level.

Bakhtiari noted, for example, that Iran’s copper industry has 25% of the efficiency seen internationally while zinc and aluminum industries only have one-third of the globally accepted efficiency.

> Industry-Academia Alienation

Mahmoud Nili Ahmadabadi, president of the University of Tehran, who is a metallurgy engineer, took to the podium next and listed major challenges facing the industries’ development projects, including lack of economic feasibility, environmental damage, old equipment and technologies, marketing, energy and water, and transport networks.

“Many of our industries are located in areas suffering from a shortage of water, which creates many problems both for them and for the environment surrounding them,” he said.

The academic further said the low skills of workforce and lack of employment of expert university graduates are other major issues. Pointing out that Iran has more than 4.2 million young graduates at present, he said unfortunately only a small percentage of them are employed in areas corresponding to their professional knowledge, while up to one in every four graduates is unemployed.

According to Ahmadabadi, there is no meaningful relationship between academic work and industrial investments.

“We can’t continue to just be importers of technology as not only current costs won’t allow this, global players also won’t cooperate with us due to the current political climate,” he said in reference to the reimposition of sanctions after US President Donald Trump unilaterally withdrew from Iran’s nuclear deal with world powers in May.

> Devising Counter Measures

Iran boasts resources that yield 68 mineral substances, said Mohammad Reza Bani-Asadirad, CEO of the Iran National Copper Industry Corporation.

“Companies in the industry formed a workgroup to come up with practical solutions before US sanctions came into effect,” he said.

“The goal was to better localize the industries, strengthen infrastructures, follow up on development projects to transform industries into green industries, and back local production."

The first round of renewed sanctions came into force in August. The unilateral US sanctions reimposed on August 6 prohibit Iran's purchase of US dollars and precious metals, part of a larger move that attempts to cut the country off from the international financial system. A second tranche of US sanctions on Iran's oil and gas sector are set to go into effect on Nov. 4.

As the chief executive said, the corporation has the capacity and aims to become one of the top 10 in the world.

At present, he said, its production figures put it at the forefront of Middle East and expansion targets are in place by the end of the Sixth Five-Year Development Plan (2017-22) that also marks the turn of the Iranian century.

“Our corporation will transform into a fully green company by the end of the current [Iranian] year [in March 2019],” he promised.

> Forex Policy Under Fire

Abdolreza Hashemzaei, a member of parliament with decades of experience in non-ferrous industries, used his time mostly to criticize the government’s decision in April to “unify” foreign exchange rates and only recognize a single rate of 42,000 rials to the US dollar.

“We all saw how much rent was created on the back of this decision in these few short months both in the steel and non-ferrous industries. Did all this money go into investments?” he asked.

The MP vowed that the parliament is ready to cooperate and pass major legislation, if the government and the academia can reach an accord and present expert plans.

> Calling Attention to US-China Trade War

The final keynote speaker was Mehdi Karbasian, CEO of the major state-owned holding company Iranian Mines & Mining Industries Development & Renovation (IMIDRO).

“In spite of all problems created by the sanctions, even as some non-ferrous metals such as aluminum and copper are specifically named on the sanctions list, these industries can stand their ground if the government and industry players pay enough attention,” he reassured.

"Non-ferrous industries account for 20% of all non-oil exports and 23% of the total value of Iran’s capital market."

The official also called on policymakers and government authorities, in addition to academics, to pay close attention to the unfolding trade war between the US and China, and the US and the European Union that specifically includes non-ferrous metals.

“About 50% of global production of these industries are in China, so we can maintain our exports and prevent them from succumbing to stagnancy if we make rational decisions,” Karbasian said.

The first day of the event was followed by an expert panel consisting of the government, the parliament and private sector representatives that continued the debate.

Later, three other expert panels were held through the participation of local and international figures, including executives with the EMEW Clean Technologies Pty. The second day includes more keynote speeches and expert panels.

The event also featured an exhibition with major local companies active in the non-ferrous industries establishing booths and conferring with peers.