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Exports of iron ore will be halted by the end of the next fiscal year (March 20, 2019), a deputy minister of industries, mining and trade announced.
“Considering the incomplete steel production chain in Iran, currently only about 67% of the country’s iron ore production is used to manufacture steel. We expect to end iron ore exports by the end of next year by establishing and finalizing concentrate, pellet and direct-reduction plants,” Mehdi Karbasian, who is also the president of state-owned Iranian Mines and Mining Industries Development and Renovation Organization–Iran’s largest holding in the mining sector, was also quoted as saying by Mehr News Agency.
He noted that iron ore exports can be permissible if they lead to further investment in mines and imports of processing machinery, pointing to Chadormalu and Golgohar mines as notable examples of ore exporters who turned into concentrate, pellet and steel ingot producers.
However, most of Iran’s iron ore deposits are low-content hematite reserves that require an advanced and costly beneficiation process before they are suitable for steelmaking. Hence, it makes more sense for the smaller, cash-strapped miners to ship their products abroad.
“This type of iron ore (hematite) is predominantly exported due to limitations and underdevelopment of steel production chain,” the official said.
Karbasian’s remarks come at a time when rising global steel and iron ore prices have buoyed Iranian products, creating the optimal condition for a boost in exports.
Foreign quotes for Iranian iron ore in China more than doubled last month. Hematite fines with 55-56% content rose 105% to $25 FOB during June 20-July 20. China’s Port Tianjin inventories of 62% Iranian hematite fines and 61% magnetite are depleting, bringing prices to $66-68 WMT.
With improved prospects for exports, the announced deadline might fail to put a stop to exports. The same scenario unfolded last year, as Karbasian pointed to March 2017 as the ministry’s target for halting mineral ore exports.
According to the Islamic Republic of Iran Customs Administration’s data, Iran exported 20.19 million tons of more than 40% content granulated hematite ore valued at $791.76 million in the last fiscal year (March 2016-17).
Iran seeks to become the world’s sixth largest steelmaker by the end of 2025. The country will require a steady feedstock of iron ore to reach the envisioned 55-million-ton annual output capacity target.
According to studies conducted by Foolad Technic International Engineering Company, Iran will require 168 million tons of iron ore, 86 million tons of concentrate, 87 million tons of pellet and 57 million tons of DRI to materialize the 2025 steel target. Shortages of all the materials still loom large.
Source: Financial Tribune
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