London 16 September (Argus) — Iran has raised its iron ore output this year as it pursues an ambitious production expansion plan.
Iron ore production at mines owned by state-controlled mining firm Imidro totalled 14.1mn t in the first five months of the Iranian year, which started on 21 March. Output was 6pc higher than a year earlier and 4pc more than the firm's production target.
Iran plans to expand iron ore production capacity to 120mn t/yr by 2025 — up from 39mn t/yr in 2012 — with likely exports of 40mn t/yr. The country has 2.7bn t of iron ore resources and 2.3bn t of probable reserves. Iran's biggest export market is China, which received 11.5mn t of iron ore in January-June, up by 37pc on the year. Iranian exports to China in 2012 amounted to 17.3mn t.
US and EU sanctions against Iran's banking system complicate trade by preventing the use of credit, which means pre-payment is often required. Dry bulk shippers are also unable to obtain insurance for Iranian cargoes, reducing the number of potential transporters. And Chinese steelmakers tend to view Iranian ore as lower quality. But there is still a market for the ore thanks to available discounts and price sensitivity of Chinese mills.
Imidro's iron ore mines include Chadormalu, Gol Gohar, Iran Central Iron Ore — all three of which currently undergoing capacity expansion projects — Sangan, Jalalabad, Myshdvan and the central plateau complex. Chadormalu was the largest mine by output over the five-month period, accounting for 5.3mn t or iron ore.
Iran has increased its domestic steel production, but not by the same degree as iron ore. Crude steel output — combining the state-run and private sectors — increased by 2pc on the year to 6.4mn t in the five months.
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