Iran Iron Ore Exports Roil Steel Production

EghtesadOnline: Esfahan Steel Company is currently operating at around half its nominal production capacity and needs about 6.5 million tons of iron ore lumps and metallic materials to operate at full capacity, the company’s deputy head said.

News ID: ۷۴۸۲۹۱

28 August 2019

Nematollah Mohseni also said in a televised program on Monday that the country has sufficient iron ore reserves, although exports of iron ores have caused many steelmakers, including ESCO, to operate below capacity, IRIB News reported.

According to Mehrdad Akbarian, the head of the board of directors of Iran Iron Ore Association, ESCO’s below-capacity operations are not mainly due to the lack of raw minerals, but also because of high production costs, high final prices and lack of money supply.

A total of 17 million tons of iron ore were exported from Iran during the last fiscal year (ended March 2019), figures released by the Iranian Mines and Mining Industries Development and Renovation Organization show, according to Financial Tribune.

Iron ore in the form of fines/lumps had the lion’s share from exports with 8.84 million tons, followed by iron ore concentrate with 5.52 million tons and iron ore pellet with 2.78 million tons.

IMIDRO’s data show exports of iron ore concentrate, iron ore fines/lumps and iron ore pellet earned $380.95 million, $258.75 million and $201.92 million respectively, meaning a total of $840 million were exported from the country during the period under review.

Iron ore exports stood at 1.29 million tons during the first month of the current Iranian year (March 21-April 20). Iron ore fines/lumps, pellet and concentrate had a share of 0.45 million tons, 0.31 million tons and 0.54 million tons respectively in total exports during the month.

Iron ore exports earned $81.39 million in the month, up 128% year-on-year.

The tonnage of shipments during the month showed a 56% growth.

Amir Hossein Kaveh, the secretary of Syndicate of Steel Pipe and Profile Manufacturers, noted that the whole steel production chain has gotten used to exporting raw, unprocessed products since global demand is high and exporters enjoy easy money from shipping their products without the need to process and create value added.

Kavous Qasemi, an official with the Ministry of Industries, Mining and Trade said Iran produces 88 million tons of iron ores annually while the country is home to 31 iron ore concentrate production units that produced 48 million tons of concentrates last year.

The official added that there are 17 pellet units in the country with an annual output of 42 million tons, while 20 direct-reduced iron units produce 27 million tons annually, 80 ingot units produce 25 million tons annually and 148 units produce steel products with an annual capacity of 22 million tons.

Qasemi said these units have been formed in the steel production chain to prevent the export of raw, unprocessed products.

“Iran exported 24 million tons of iron ores in the fiscal 2012-13, whereas iron ore exports declined to 8.8 million tons last year,” he said.

Iran was the sixth largest supplier of iron ore to China by shipping about 22 million tons to the world’s largest importer of iron ore in 2017.

Iran accounts for about 3% of global iron ore reserves estimated at 4.5 billion tons with over 200 ore deposits.

According to the United States Geological Survey, Iran holds the world's 10th largest iron ore reserves.

“A new iron ore deposit was discovered in Iran's Yazd Province in 2017, which is estimated to possess about 2 billion tons with a 70% iron content,” the head of Yazd Industries, Mining and Trade Organization.

“This mine is globally and nationally unique in terms of reserves and content, and will be a significant boon to provincial industries and the country as a whole,” Mohammad Reza Alamdar-Yazdi was also quoted as saying by Mehr News Agency.

The official noted that the reserves were discovered at a depth of 1,500 kilometers.