Overview of the Iranian Iron and Steel Markets -...
Transcript of Overview of the Iranian Iron and Steel Markets -...
Overview of the Iranian Iron and Steel Markets Dr. Mehdi Karbasian (Deputy Minister and Chairman of IMIDRO)
Iran Mines and Mining Industries Development and Renovation Organization
December 2014 Final Version
18th Middle East Iron and Steel Conference
Dubai, U.A.E - 8 - 10 December 2014
About IMIDRO (Iran Mines and Mineral Industrial Development and Renovation Org)
• IMIDRO Established 12years ago by merging the Ministry of Mines andMetals and Ministry of Industry to reduce Government size and bureaucracy.Our Mission is to develop and support Mine and Mining Industries Projectsand companies in Iran.
07/
12/2
014
2
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
IMIDRO is a Governmental Organization and Ranked As a DevelopingOrganization in Iran by Law.
IMID
RO
History
69 Project Constructed
(Mining, Steel, Zinc, Copper, Aluminum, Gold , Infrastructure…)
17 B$ Investment
70.000 Jobs created
Future
29 project under development
Total Current investment of 9B$
)Steel, Zinc, Copper, Aluminium, Gold, Magnesium…)
Supply Chain of Iron and Steel Sector in Iran
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
3
Iron and Steel Sector in IranIRAN Iron Ore
14th in world Ranking, with a Reserve of 2.5 Billion TonsConcentrate Iron Ore
Current Production: 24 Million Ton
Target for 2025: 66.2 Million Ton
Pelletizing Plant
Current Production: 21 Million Ton
Target for 2025: 82.8 million Ton
DRI (Direct Reduced Iron)
Current Production: 16 Million Ton
Target for 2025: 54.6 Million Ton
Crude Steel from EAF
Current Production: 14 Million ton
Target for 2025: 46.1 Million ton
Lump and Fine Iron Ore
Current Production: 27 Million Ton
Export: 24 Million Ton
Pig Iron (BOF)
Current Production: 2.2 Million Ton
Target for 2025: 5.9 Million Ton
07/
12/2
014
4
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Total Crude SteelCurrent Production: 16 Million Ton
Target for 2025: 52 Million Ton
Due to availability of Nat Gas, More than 85% of steel production in Iran is based on EAF technology
IMIDRO Strategies Focused on Development along with competitiveness of Iran Mining Sector
IMIDRO Strategies on Mining Sector
To increase the share of Private sector in
Mining and Infrastructure
To increase mining activities in un-
developed area of Iran
To promote investment in related International
Projects
Productivity
Project Funding Supportknow-how and
technology developmentMarketing
support and Export
development
To invest in Hi-Tech and Hi-Risk sector of Mining
Business
Human Resources
Development
07/
12/2
014
5
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Outlook for Iran Steel and DRI Consumption
• Middle East annual consumption of steel is 76 Millionton and with a share of 25%, Iran ranked 2nd inSteel consumption in Middle East after Turkey (35%).
• Recent studies shows Iran Crude Steel Consumptionwill reach to more than 46 million ton in 2025.Additionally there are an export marketopportunities for 6 million ton mainly in Middle Eastand EU countries which means Iranian Crude SteelProduction could reach to 52 Million ton.
• Most of Projects up to that level defined andcurrently under developments and there are manyinvestment opportunities for foreign investors onthose.
• Most of Steel making projects under development inIran uses DRI-EAF technology. Current production ofDRI in Iran is 16 million ton which will reach tonumber 1 in world ranking in production of DRI (56Million ton in 2025)
46,341
22,000
27,000
32,000
37,000
42,000
47,000
100
0 x
To
n
Iran Steel Consumption 2025 – Different Scenario
IranSaudiArabia
UAE Qatar Oman Bahrain Iraq
2019 40000 1090 1289 80 40 1550 800
2012 16,000 5,660 2,720 2,420 1,460
-
10,000
20,000
30,000
40,000
50,000
60,000
Current DRI Capacity and additional Expansion till 2019
07/
12/2
014
6
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Why Steel production in Iran is so competitive?
Access to Raw Materials from Eastern and Northern Neighbors with No direct access to Sea (Afghanistan and CIS Countries)
South Pars Field, largest Nat gas Storage
• Skill workers and Experienced Companies
• Big Local Market =25% Middle East
• Big Consumption in Neighbors
• Suitable Road and Rail Network
• Suitable Infrastructure
• Special Economic zone (Tax free)
• Security is one of the best in Middle East
Rich Iron Ore Mines in Eastern/Central Part- Open Pit - 2.7 Billion Ton of reserve
Afghanistan resources (1000 B$) and opportunity for Iran Chabahar as new raw material HUB
Crude Steel production Cost Per Ton: 280-320 US$, Margin around 27% of Sales
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
7Iran has a Long Sea Border
Iran Iron Ore Mines Shown in the map
Outlook for Iron Ore Concentrate and Pellet (52 Million ton of Steel)
• Iranian companies already defined most of the steel projects to reach to 52 million ton to supply demand in 2025.
• By considering above, there are still un-balances in supply chain and opportunity for definition of new projects including up to 19 million ton in Concentrate Iron ore.
• Additionally, IMIDRO should increase Iron Ore Exploration and up to 23 Million Ton of Exploitation.
07/
12/2
014
8
23 2
7 29
56
35
63
37
5958
90
66
116
57
86
86
138
2 4
-19
-23
-40
-20
0
20
40
60
80
100
120
140
160
Supply/Demand BalanceCurrent Production projects Under Construction Total in 2025 Required Balance
For Exploration of new resources,IMIDRO will invest up to 500 Million US$in the next 5 years to define and finalizenew deposits.
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Iron Ore Mine Reserve and Ownership• Iron ore exploitation grow by more
than 6 times during the past 10 yearsand reached to 51 Million Ton.Average grade for Iranian Iron ore is51% which 95% of them are mainlyMagnetite and mainly located inEastern Part of the country , Mainly inYazd , Kerman and KhorasanProvinces.
• Currently Iran operating 156 Iron Oremines)5% of them with a reserve 86%of the country reserve controlled byIMIDRO).
• IMIDRO Biggest mines are including:
Sangan with a reserve of 1.2 Billion Ton(Ranked as 9th in the world)
Gole Gohar with 1 Billion Ton (Ranked as10th in the world)
Chadormalu with 0.2 Billion Tone
46
7.3
6.6
6
0 0 0
19
4.4
1.8 2.8
0
5
10
15
20
25
30
35
40
45
50
Iran Turkey Oman Bahrain kuwait Lebenan Qatar
MIDDLE EAST IRON ORE AND PELLET PRODUCTION - 2012 (MILLION TON )
Iron Ore Pellet
07/
12/2
014
9
Mine Production Costs: 16-25 US$/Ton (one of the best practices in the world)
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Investment Opportunities and Incentives Iron and Steel Sector
Exploration-Mining and Processing-Steel Plant and Related Products
07/
12/2
014
10
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Incentives for Foreign and Private Sector investment
• IMIDRO is promoting foreign and private investment in the projects in Mining and Metal projects and has the following incentives for investors.
• To support the project, IMIDRO is willing to participate as a partner for foreign investor, if required
07/
12/2
014
11
Incentives Mining Exploration
Mineprojects
Mining Industries
long term contract for Exploration, Extraction, Processing, Marketing
Support for allocation of loan from Iran Oil Fund for part of investment
Required permits from Authority
long term contract for raw material supply
Allocate Land in Special Economic Zone (Tax Free…)
To Provide infrastructures required in SEZ
Reserve Sharing Contract after Exploration
Possible IMIDRO participation as shareholder in J.V Company
Exploration Risk Insurance by Government
FIPPA Coverage
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Investment Opportunity for Mine Exploration
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
12
Exploration Projects and Opportunities for Partnership and Reserve Sharing
13
Province AreaKhorasan-Sangan 11500
Sistan –Baluchistan-Border line 15000Sistan –Baluchistan-Caravan 14300South Khorasan-Border line 6116
Fars-Bahram Goor 5000Ardebil-Ghezelozan-Khalkhal 1351
Kerman-Hormozgan-Sirjan 30000Ardebil-Sabalan 1696
Ardebil-Baghrodagh 874Yazd-Bafgh-Robat 10558
West Azarbaijan-Khoi-Maako 1218West AzarbaijanTakab-Piranshahr 5135Kohkelooyeh-Boyerahmad 1006
Total Area (Km2) 103754
3 years Planned Land Resource = 200,000 Km2
Activities: Airborne hyper spectral sensors for geological projects
Geology 50000 Km2 + Border area Wide: 20 Km
Planned drilling for 2014: 100,000 Meter
Ardebil
GolestanYazd-Isfahan
Yazd-Robat
Kerman(Sirjan-Fariab)
Sistan-BaluBorder
Saravan
Golestan
Kerman ShahKohkelooyeh-Boyerahmad
Piran Shahr
N.Kordestan
S.Kordestan
Sangan
Khorasan Border
FarsBahram Goor
Investment Opportunities in IMIDRO Mining Sector
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
14
Investment Opportunity in Coal Mining and Related Processing Plant
AreaZone
ReserveMillion
Ton
Proven Reserve
Project Designed Capacity
Invest.
Parvade4Tabas
S.Khorasan
250 40 Mine Development+Related Equipment+a Plant to produce Concentrate coal
450,000 Concentrate Coal
101 M Euro
KhomroodKerman
100 31.5 Mine Development+Related Equipment+a Plant to produce Concentrate coal
400,000Concentrate Coal
123 M$
SavadkoohMazandaran
50.5 10 Kordabad Mine Development+RelatedEquipment's
230,000Raw Coal
37 M$
Coking Coal Plant in Savadkooh 300,000Coke
86 M Euro
Total Investment in Coal mining and Related Processing Plant 400 M$
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
'sm
ines
an
d m
inin
g
ind
ust
ries
15
Investment Opportunity in Steel and related Industries
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
16
Plant Location Project Inves.Chabahar Steel Plant Located in Chabahar Free trade zone
5 Million Ton Steelmaking Plant + 1000 MW Power Plant
3.15 B$
Natural Gas now reached to Pakistan Border and Raw Material output from Afghanistan mines are increasing with a big portion of them to be exported via Chabahar Port.There are unique opportunity of investment for an steelmaking plant using Nat Gas from Iran along with Iron ores from Iran and Afghanistan. Most of Infrastructures required for the project already available or under development
Bandar Abbas-2 Steel Plant Located PGSEZ
1.6 Million Ton Steelmaking Plant 800 M$
The government and private sectors made a big investment in PGSEZ during past 10 years. Now this SEZ productizing annually 1.6 Million Ton of Steel, 200,000 Ton of Aluminum and other Mining industries products like Zinc, DRI for export or local consumptions.PGSEZ located close to sea and has most of infrastructures required for this new project already available at site including railway, Nat Gas, A 12 Million ton of Jetty (6 million ton operation, the rest by end of 2015) for import and export of raw material. 2 Power Plant (1000 MW) under construction to provide necessary electricity for industrial plants currently under operations.
Assaluyeh Steel Plant Located in PSEZ (Parsian SEZ)
1.6 Million Ton Steelmaking Plant 800 M$
South Pars Field is world biggest Natural Gas Storage with total reserve of 51 trillion cubic metres. To be able to use the natural gas, IMIDRO intend to produce mineral industries which raked as Energy Intensive Products like Aluminium, Steel and Cement and … in PSEZ which located close to sea. Nat gas already available and a Jetty with a capacity of 15 Million Ton already planned and studied.
Total Investment Opportunity4.75 B$
Chabahar Steel PlantBandarAbbas-2
Steel Plant
AssaluyehSteel Plant
Other Investment Opportunity (Graphite Electrode, Titanium oxide and Power Plant)
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
17
Plant / Location Capacity Inves.Kahnoj Titanium Project- Southern Kerman 130,000 Ton Concentrate
+ 70,000 Pigment103 M$
The Mine is one of the world biggest Titanium Mine with a reserve of 150 Proven Million Ton and is excellent from economical view (Internal rate of Return). Graphite Electrode for Steelmaking process (EAF) -Ardakan, Yazd 30,000 ton 300 M$Every Ton of Steel in Iran normally use between 2 to 2.5 Kg of Electrode. Iran now producing up to 14 Million ton of Steel using EAF method which means an annual consumption of 32000 ton of Graphite Electrode, while the production of steel will increase to its outlook (52 Million Ton), Demand for Graphite electrode will reach to 100,000 Ton. The Ardakan Plant is under construction in partnership with Steel Makers and IMIDRO and there is unique opportunity for foreign investors to involve as technology and machinery provider or financer.Power Plant - Bandar Abbas 2 , Hormozgan 500 MW 260 M EuroA lot of industries currently under operation (HOSCO, Almahdi …) or construction (HOSCO 2, Almahdi 3, Saba Foolad, Kaveh…)in SEZ in Bandar abbas. As they come to operation, They need a huge power where this project will provide electricity for a portion of future demands.IMIDRO is willing to sign the contract with interested partners based on BOO or BOT for this project.Power Plant - Parsian , Hormozgan 500 MW 260 M EuroDue to Availability of Nat Gas in Assaluyeh, IMIDRO Established a SEZ for Energy Intensity Products Like Steel and Aluminum in Parsian. As an incentive, IMIDRO also provide infrastructures for investors if required including power and water and Jetty. We guarantee the market for investors in infrastructures and purchase the products (electricity, water …) in advance.IMIDRO is willing to sign the contract with interested partners based on BOO or BOT for this project.
Total investment: 1050 M $
Iron and Steel Challenges • Water Shortage
Due to Very Long Dry Seasons, Water Shortage is the main challenges for Steel Industries in Iran. As a result, most of expansion and New Steel Projects have been moved to the south of the country close to Sea
• Transportation
Railway Tariff for Iron Ore is higher than our international competitors and need to be down by 20%
Jetty Capacity need to be expanded, Make it Available to receive Ships with Bigger Sizes (Panamax and Cap Size)
• Other changes
Global Steel Overcapacity had driven down prices: Ernst & Young estimates global overcapacity at 479 million metric Tons!!! This brought the price down and create the Challenges for Steelmakers as well as Iron Ore suppliers.
Low Added Value of Steel Industry compare to our international competitors (need to move to more Hi-Tech steel products)
Technology and Productivity
07/
12/2
014
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
18
For More Information about IMIDRO Projects in Steel Sector or Other Sectors, Please visit us at www.Imidro.gov.ir
Also you are warmly welcome to visit us at our Head office: No.43, Sepahbod Qarani Ave. Tehran, Iran
Contact Person: Mr. Mohammad Taheri, Head of International AffairPhone: +98-21- 888 29 181Fax: +98-21- 888 42854Email: [email protected]
THANK YOU!
07/
12/2
014
19
IMID
RO
: Yo
ur
gat
eway
to
Iran
's m
ines
an
d m
inin
g in
du
stri
es
Related conferences in Mining Sector in Iran (Including Iron and Steel industries)
1- 5th ISMIC Iran Steel Market Conference, 27 and 28 of January 2015 ,Tehran www.events.den.ir
2- IMIS Iran Mine and Mining Industries Summit, 1 May 2015, Iran www.imis2014.com