Two Steel Projects Inaugurated in N.E.

EghtesadOnline: Two iron ore processing plants were inaugurated on Sunday in a ceremony attended by President Hassan Rouhani and Minister of Industries, Mining and Trade Mohammad Shariatmadari.

News ID: ۷۸۲۵۰۹

07 May 2018

The projects included a direct-reduced iron plant established by Sabzevar Pars Steel Company and a pellet production plant set up by Khorasan Steel Company.

Located in Khorasan Razavi Province, the plant has the capacity to produce 800,000 tons of DRI per year in its first development phase, most of which will be used to feed SPSCO's bloom and billet production.

The president inaugurated the DRI plant at 12 p.m. local time, according to Financial Tribune.

DRI, also called sponge iron, is produced by using a reducing gas made from natural gas or coal. It is most commonly made into steel using electric arc furnaces. About 70-75% of Iranian mills use EAFs.

According to Minews, about 7.5 trillion rials ($178.5 million) were invested in the project in a joint venture between SPSCO and Iranian Mines and Mining Industries Development and Renovation Organization.

Sabzevar DRI plant is part of the so-called "Seven Provincial Steel Projects" scheme undertaken by IMIDRO.

The seven projects date back to 2006 when the government decided to implement eight steel projects in the provinces of Chaharmahal-Bakhtiari, Fars, Khuzestan, Yazd, Kerman, East Azarbaijan, South Khorasan and Khorasan Razavi.

After only one of the projects was taken over by the private sector, the rest were not well received due to their inappropriate locations and undesirable progress. Therefore, IMIDRO took over 65% of the projects’ shares and undertook the task of attracting the required investment.

The latest of the projects to come on stream was the 800,000-ton per year Neyriz Ghadir Steel Company's DRI plant, inaugurated in late January. It was equipped with the Iranian direct-reduction technology called PERED, or Persian Reduction. The technology, which makes optimum use of energy and raw materials, is invented and patented by MME Company, an Iranian engineering company registered in Germany.

The Presidential Office's website said Sabzevar DRI plant has been established using "indigenous engineering knowledge and direct-reduction technology by Iranian contractors", without specifying whether it is PERED or a modified version of the more common MIDREX process.

Two other 800,000-ton per year DRI plant established by Miyaneh Steel Complex and Shadegan Steel Company came on stream in October and May 2017 respectively.

> World's 2nd Largest DRI Producer

Iran is currently the world's second biggest sponge iron producer, closely trailing top performer India, according to statistics by World Steel Association.

The country produced 2.12 million tons of DRI in March to register 47.3% growth year-on-year from 1.4 million tons in March 2017.

In comparison, India's DRI output grew by 6.1% YOY to 2.5 million tons in March, compared with 2.3 million tons the year before.

As per the goals set in the 20-Year Vision Plan (2005-25), Iran’s steel industry is stipulated to become the world’s sixth largest producer of the industrial material with an output capacity of 55 million tons of crude steel per year by 2025.

The country has been on a path of aggressive capacity making ever since, with DRI plants leading the charge.

Iran is already the world's 10th largest producer, placed between Brazil and Italy with a crude steel output of 6.8 million tons in the first quarter of 2018, up 47% YOY.

The Iranian steel industry also had the fastest growth in production among all producers of more than 1 million tons of steel per month. Considering all producers, Iran is ranked second in terms of fastest three-month and YOY growth in March respectively, Worldsteel reported.

> Khorasan Steel's 2.5m Tons p.a. Pellet Plant

The second leg of the president's Sunday tour brought him to Neyshabour City, where he inaugurated Khorasan Steel Company's 2.5-million-ton per year pellet plant.

"The project was established with an investment of 390 billion rials ($9.28 million) and €44 million," Raziyeh Alirezaei, the head of Khorasan Razavi's Industries, Mining and Trade Organization, said.

The pellet plant, the capacity of which is set to reach 3-4 million tons in the next phases, will enable Khorasan Steel Company to become one of the few steelmakers in Iran to operate a full iron ore to steel production chain.

Khorasan Steel Company was established in 1989 by the giant Japanese steelmaker Kobe Steel in the northeastern part of Neyshabour County in Khorasan Razavi Province.