Iran: IDRO and Domestic Steel Manufacturers Signs a Pact to Set up 10 MnT Steel Plant

Iran’s Industrial Development and Renovation Organization (IDRO) has signed a memorandum of understanding (MoU) with a consortium of seven domestic companies for setting up of a steel unit with 10 MnT of capacity in Persian Gulf Mining and Metal Industries Special Economic Zone (PGSEZ) in the southern province of Hormozgan.

The MoU has been signed on Tuesday and along with adding 10 MnT of crude steel capacity, the project aims to create jobs for 10,000 people. According to reports, the project is scheduled to be implemented in the time span of five years. The project will have an advantage as PGSEZ is close to ports as well have the existence of iron ore mines, and is close to international waters.

Two weeks ago, Iranian Industry, Mining and Trade Minister Reza Rahmani said the country has achieved proper self-reliance in steel industry. The steel industry is one of the industries in which some good investment has been made and today it has become a production advantage, Rahmani further added.

Making the remarks in a meeting with the members of Iran Steel Association at the place of the ministry, the minister said, “This industry can be still developed and regarding the huge investment made in this sector during the past years, we will soon observe a good balance also in the production chain of this product in the country.”

“Our policy is to develop large industries by the sea,” IDRO chairman Khodadad Gharibpour said during the MoU signing. Governor General of Hormozgan Province Fereydoun Hemmati added: “The pooling of small units and the development of large-scale units is a plan that was implemented in China and brought significant gains to the country.” The formation of a consortium in large industrial and mineral projects could help mitigate the effect of economic sanctions, he added.

Besides IDRO, the other signatories to the agreement are merchant slab producer Hormozgan Steel and hot strip maker Saba Steel, both Mobarakeh Steel subsidiaries, and merchant billet maker South Kaveh Steel. Also included are iron ore pelletiser Maadkoush Pelletizing Complex and iron ore miner Gol Gohar.

The current crude steelmaking capacity in PGSEZ is 5-5.5 MnT, which will be more or less doubled by the new consortium by 2025. The PGSEZ’s role will be to provide electricity and water for the expansion.