The Forum for Partners in Iran's Marketplace

June 2019, No. 91


Achievements of Mines,
Mining Industries of Iran

Under conditions that we have left behind four decades since the outbreak of the 1979 Revolution, it must be acknowledged that in spite of all the difficulties and challenges the country has faced, steel production is in the forefront of the development of the mines and mining industry sector. Becoming the 10th biggest crude steel producer in 2018 is good news which reflects the convergence of the government and the private sector, which have been able to improve the global status of Iranís steel in a single direction.

Of course, steel industry experts and executives know that steel as the mother industry acts as the driving force behind many upstream and downstream industries, as well as design, engineering, manufacturing, execution and operation sectors. In a recent meeting with heads of mines and mining industry sector organizations, development of a balanced steel chain was underlined. A look at statistics also highlights the importance of this issue.

Our land possesses greater talents and higher capabilities for the development of this industry, and the collective performance of former and present managers and experts has led to an annual production capacity of 33 million tons of crude steel in Iran. In Sangan region (Khorasan Razavi Province), development has exceeded forecasts and the target of 55 million tons could be met even before 1404 (2025).

One side of this output growth is a jump in labor force employment and development of mineral and mining industries in compliance with the environment standards, but on the other hand it is important to focus on infrastructure. It can be admitted that the development of infrastructure is the most important and one of the key areas for development of the steel industry and other mineral industries.

Fortunately, the measures taken by companies that have been established and acquired the technology in Iran over the past decades are noteworthy. This achievement is admirable, especially in terms of investment, employment and capacity building, but now more work forces can be directed from private sector companies and investors to engage in developing infrastructures.

Private companies are believed to be well placed to play a role in partnership and development, and in the current situation, IMIDRO (Iranian Mines & Mining Industries Development & Renovation Organization) is working to attract investors in the field of infrastructure. This, while bringing more peace of mind to fellow countrymen in different parts of the mines and mineral industries, is another factor in stimulating the demand for steel, cement, copper and other products, the overall meaning of which is creating a new opportunity for growth of employment and generating more revenues.

Fortunately, steel chain manufacturers have succeeded in exporting steel products despite the external constraints and pressure from certain countries, and partly offsetting domestic demand reduction by directing products to foreign markets. Now we are determined to create space for consumption and demand for mineral products and mineral industries by increasing attention to the further development of infrastructures such as roads and railways, sea transport, as well as supplying water, electricity and gas. This important task, as in recent years, will be achieved through private sector participation, with the ultimate goal of attention to social responsibility.

For example, Sangan has become the symbol for development and processing of iron ore today. The advent of five processing plants in one of the farthest mineral areas in Iran reveals how important the project is. In fact, Sangan, with a reserve of 1.2 billion tons of iron ore in the eastern part of the country, was known until few years ago as a mine that carried out numerous programs on paper so that only few people had the power to make them operational. However, the reality is that the collective efforts of the government and the private sector partnership have given Sangan a new face.

This new and active face is the result of a shift in the outlook that has taken shape as from the 11th government, utilizing Article 44 of the Constitution and macro policies. In a trip we had to Sangan with CEOs of investor companies recently, there were a number of things that attracted attention, one of the most important of which was the active participation of domestic investors.

The increase in the number of concentrate and pelletizing plants in Sangan from one to five units is in line with investing 100 trillion rials. It is noteworthy that the government alone cannot afford such an investment; even if there was a possibility there would not be space for the presence of the private sector. Therefore, this development method should be taken as good omen, which can be implemented in some other development projects. However, in the case of Sangan, it should be acknowledged that investment and investor participation in this massive complex are still ongoing, and investments in the coming years will reach 200 trillion rials, with the goal of creating a capacity of 17.5 million tons of concentrate and 15 million tons of pellet.

The other side of the coin for the development of Sangan is attention to infrastructure and social responsibility. In the opinion of the officials of the related organizations the development in Sangan is beyond expectation and this has caused infrastructures such as access to roads and urban neighborhoods not to grow along with the mining and processing sector.

We believe that creation of a committee for infrastructure development can be a starting point for addressing these needs. Previously, actions have been taken in IMIDRO, one of which is the preparation of a memorandum of understanding for participation in infrastructure development. This cooperation document is now signed, so that the affairs of this sector can be organized and implemented.

It is clear that developmental effects are not limited to capacity building and production, but the creation of prosperity for the people and the distribution of wealth in that area are among the measures that sustain development. Fortunately, the increase in the number of workers in Sangan to 5,000 people is a step towards this goal, but the continuation of the path requires a two-way effort to increase the welfare of the region. The creation of new land and rail transport lines, on the one hand, requires integrated cooperation between the government agencies and, on the other hand, the participation of the investment companies.

Today, IMIDRO is at the forefront of social responsibility and has taken effective measures in the field of environment and humanitarian issues. Although Sangan has launched large projects and accounts for a share of 22% in the supply of raw materials for the steel master plan, with the participation of investors and related agencies, it is also implementing its goals in the area of ​​social responsibility, because this organization regards satisfaction of the inhabitants of the mineral areas its great goal.



Subscribe to

  June 2019
No. 91