Major Pellet-Making Plant to Come on Stream in Iran

EghtesadOnline: One of Iran’s largest pellet-making projects is currently in the final phase of construction in the northwestern Khorasan Razavi Province and will start production in the early days of the next Iranian year (starting March 21, 2017), the province’s deputy governor, Ali Rasoulian, has announced.

News ID: ۷۷۴۴۶۷

08 March 2017

According to the official, Mobarakeh Steel Company is constructing the plant in Sangan Mineral Zone with a 12-trillion-rial ($315.78 million) investment. The plant’s production capacity stands at 5 million tons per year.

“The plant’s power supply is expected to start next week and its gas supply will also be established in a month,” he said.

Together with its subsidiaries, MSC is the largest flat steel producer in the Middle East and North Africa region and Iran’s largest steelmaker, accounting for 1% of Iran’s GDP, according to Financial Tribune.

The company accounts for approximately 50% of the country’s total steel output and holds around the same share of domestic flat steel consumption, which stood at around 7.5 million tons last fiscal year.

The company produced some 5.5 million tons of flat products during the period.

Known as “Iran’s Mineral Heaven”, Sangan Mineral Zone is home to over 1.2 billion tons of estimated iron ore reserves, which are expected to be much more.

Rasoulian noted that currently nine mineral processing plants are under construction in the region with an annual production capacity of 17.5 and 15 million tons of iron ore concentrate and pellets respectively.

“The projects require about 250 trillion rials ($6.57 billion) of investment over the next five years,” he said.

Iran aims to become the world’s sixth largest steelmaker as per the 20-Year Vision Plan (2005-25), which envisions an annual crude steel production capacity of 55 million tons per year by the deadline.

According to Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, Iranian steel mills have so far materialized 31 million tons of the target.

To meet the target, production capacity for pellets should rise by 150% to 80 million tons.

Iron ore pellet is an enriched form of the metal shaped into balls and used as raw material for blast furnaces, which is used in integrated steelmaking, during which coke, iron ore and pellets react together under a hot air flow to form liquid hot metal, also called pig iron.

The rise in domestic pellet-making capacity comes at a time when government officials have announced plans to slap duties on exports of unprocessed iron ore as of March 2017 to increase the export of more value added products like pellets and use raw iron ore for the development of domestic steel industry.

The new pellet supplies should end reliance on imports and turn Iran into a major exporter of the material, amid weak domestic demand for steel at present.

Domestic demand for pellets stands at 28-29 million tons a year.