Iran's Mobarakeh Steel Company: World's Biggest DRI Producer

EghtesadOnline: Iran's largest steelmaker Mobarakeh Steel Company is the world's biggest producer of direct-reduced iron.

News ID: ۷۴۷۰۸۷

17 April 2019

The company, along with its subsidiaries, accounted for more than 43% of Iran’s total direct-reduced iron production last year (ended March 20, 2019) with an output exceeding 10.5 million tons.

According to Mokhtar Bakhshian, a company official, Iran’s overall DRI production stood at more than 24 million tons last year, IRNA reported.

Located in southwestern Isfahan, MSC has a remarkable share of 50% in Iran’s steel production, according to Financial Tribune.

The company is the biggest steel producer in Iran as well as the Middle East and North Africa.

Latest statistics provided by the Iranian Mines and Mining Industries Development and Renovation Organization show a total of 16.28 million tons of slab, bloom, billet and ingot were produced during the 10 months to Jan. 20, up 9% YOY.

Mobarakeh Steel Company, with its subsidiaries Saba and Hormozgan Steel, was the biggest producer with 7.7 million tons (up 7% YOY).

Khouzestan Steel Company came next with 3.16 million tons (up 1% YOY), followed by Esfahan Steel Company with 1.89 million tons (unchanged YOY), South Kaveh Steel Company with 860,717 tons (up 16% YOY), Khorasan Steel Company with 853,875 tons (up 26% YOY), Chadormalu Steel Company with 743,061 tons (up 154% YOY), Arfa Iron and Steel Company with 713,400 tons (up 8% YOY) and Iran Alloy Steel Company with 351,682 tons (up 3% YOY).

World's Second Largest DRI Producer

According to World Steel Association, Iran was the second biggest producer of DRI with 25.54 million tons of production in 2018.

India, Iran's primary rival in DRI output, increased its 2018 production by 2.9% YOY to 30.36 million tons.

Global direct-reduced iron output grew 11.6% year-on-year to 84.12 million tons last year.

India, Iran's primary rival, increased its 2018 production by 2.9% YOY to 30.36 million tons.

The largest increase was in Argentina where output increased 30.5% YOY to 1.6 million tons.

PERED Engineer

Iran has been the engineer of the so-called direct-reduction technology called PERED, or Persian Reduction.

Invented and patented by Mines and Metals Engineering GmbH, an Iranian engineering company registered in Germany, China’s Shanxi Taihang Mining Co., known as CSTM, is now taking operational steps to apply PERED.

PERED technology, which makes optimum use of energy and raw materials, reduces production costs with the added advantage of being more environment-friendly compared to other direct reduction methods.

There are generally three methods for DRI production: HYL process, presently marketed under the Energiron trademark, jointly developed by Tenova and Danieli, and MIDREX Process patented by Midrex Technologies Inc. along with its parent company Kobe Steel Ltd; in addition to PERED.

The replacement of MIDREX and Energiron with PERED will cut production costs by cutting on the required initial investment and operational costs.

Speaking to Financial Tribune in an exclusive interview, the engineering manager of MME, Hossein Aziztaemeh, said a majority of DRI plants in Iran utilize the MIDREX reduction technology.

In PERED, the reduction process is known to be more efficient, employs improved cooling methods and cuts pollutant gas emissions.

With less heat, more homogeneous reducing gas, more controllable pellet feed and use of centrifugal compressors, PERED requires less water, electricity and gas to operate, alongside less operational and maintenance costs.

According to MME’s website, PERED can also produce cold and hot DRI, hot briquetted iron and a combination of all three.

Aziztaemeh said PERED has so far been used in three DRI plants in Iran, namely Shadegan in Khuzestan Province, Mianeh in East Azarbaijan Province and Neyriz steel company in Fars Province.

Kerman Province’s Baft Steel Complex also plans to utilize the technology in the near future.

According to the MME manager, in addition to the afore-mentioned Chinese company, firms from Oman and India have expressed interest in importing the Iranian technology at the SteelVia conference held in Dubai, the UAE, on Sept. 25-27.

The contract with CSTM to import the Iranian technology was signed in May 13, 2013. However, the implementation of the project was delayed over the years due to several reasons.

“The Chinese did not find the production of direct-reduced iron economically viable, but things changed after the Chinese government imposed heavy taxes on ‘unclean’ industries,” he told us.

Therefore, they decided to move toward more clean industries, as they seemed more viable.

CSTM is China's first company to use coke oven gas as an alternative to natural gas to produce DRI. Using MME’s production technology, service and equipment, the company aims to increase its iron ore processing productivity and reduce emissions.

Aziztaemeh saif the project will become operational by the end of 2019.

“MME has several responsibilities here, such as offering engineering services, selling equipment (completely manufactured in Iran), supervision and offering relevant training,” he said.

The project in China is said to be Iran’s first PERED project implemented overseas.

DRI, also known as sponge iron, is produced from direct reduction of iron ore in the form of lumps, pellets or fines by a reducing gas. It can be processed to create wrought iron.

Crude steel is dominantly produced using two methods: making cast iron in blast furnaces or using DRI and scrap in electric arc furnaces.

More than 70% of the world’s steel are made using blast furnaces, while Iranian steelmaking is mostly dominated by EAFs.

The selection of each production method depends on various parameters, especially raw material and energy costs.

Blast furnaces require large quantities of coking coal, a product hardly available in Iran and costly to import. This is while the country enjoys huge gas and iron ore reserves, making EAFs the more desirable route to take. The shortage of scraps has consequently driven steelmakers to use DRI.

With such a sizable production, cutting costs would give a considerable boost to the industry. And PERED is designed to do just that among others.

Iran is the second biggest producer of DRI in the world after India. According to World Steel Association, the country produced 25.54 million tons of DRI in 2018.

India's output stood at 30.36 million tons last year.

Latest data published by IMIDRO show production of direct-reduced iron stood at 21.13 million tons during the 10 months to Jan. 20, up 27% year-on-year.