“We are witnessing a significant reduction in investment in the country’s active mines,” said the deputy chairman of the Iran Chamber of Mines and Mining Industries Commission, noting that the setting of mandatory prices has led to imbalances in the iron and steel chain.
While the government plans to increase steel production in the country to 55 million tons by 1404; Thus, to meet this capacity, the extraction and production of 70 million tons of iron ore in 1398, should reach 154 million tons, which with the current situation, there is no prospect of achieving this amount of production.
Sajjad Gharghi, while emphasizing that due to government interventions in the iron and steel chain in recent years, we are witnessing unbalanced development of this chain; “In fact, these interventions and policies have led to the closure of more than 200 iron ore mines,” he said.
*** Reform of government policies in the iron and steel chain
He considered it necessary to reform the government’s policies in the iron and steel chain and added: “Ordering the prices of iron ore, concentrate, pellets and sponge iron based on a coefficient of the price of Khuzestan steel ingots is one of the same policies.” The considered coefficients have created a significant gap with world rates, as a result of which more than 86,000 billion rials in subsidies are paid from the mining sector to the country’s steel industry.
The Deputy Chairman of the Mining and Mining Industries Commission of the Iran Chamber of Commerce and Industry said: “The cheap sale of iron ore in large mining companies has caused them to be useless, and in small and medium-sized mines, it has caused them to close and lose money.” For example, according to the audited financial statements, Golgohar Mining and Industrial Company has earned less than 15,000 billion rials less in 2009 alone due to the orderly sale of its concentrate and pellets at a lower price in the domestic market. This drop in revenue has also shifted the strategies of large mining companies from investing in the country’s mines to steel projects and even investing in Australian mines.
*** Reduce investment with wrong policies; In case of need to produce more iron ore
Gharghi, while warning about the continuation of the current pricing process in the country’s iron and steel chain, stated: The National Statistics Center of Iran calculates the value of investment in the country’s active mines every year, which is also available until the end of 1397. According to these statistics, for the first time since the collection of statistics (1375), three consecutive years in the years 1695 to 1397, the value of investment in iron ore mines in the country has been negative. In 1397, compared to 1394, we are witnessing a 53% decrease in investment in Rials and 89% in Dollars. Thus, in a situation where the country needs to produce more iron ore to meet the needs of steel units under construction, due to the policies adopted, investment has fallen sharply.
He continued: “While we are witnessing a significant decrease in investment in the country’s active mines, the government intends to increase the amount of steel production in the country to 55 million tons by 1404;” Thus, to meet this capacity, the extraction and production of 70 million tons of iron ore in 1398, should reach 154 million tons, which with the current situation, there is no prospect of achieving this amount of production.
*** Street teacher performance
The Deputy Chairman of the Mining and Mining Industries Commission of the Iran Chamber of Commerce and Industry stated that during the few months that the street school was headed by the Ministry of Silence, they showed that they were experts and consulted with unions and organizations and were willing to make the right decisions for industrial and mining development. Are countries; He said: “We welcome his introduction as the proposed Minister of Industry, Mines and Trade and we hope that after the vote of confidence in the parliament, the necessary decisions will be made for the sustainable development of the iron and steel chain.” This issue is within the power of the proposed minister.
Gharghi added: The Ministry of Silence, with a correct understanding of the current situation of the chain, put the change of price coefficients on its agenda and asked the Iranian Chamber to investigate the issue. According to the Iran Chamber, joint meetings were held between the Macroeconomic Commission and the Chamber’s Mines and Mining Industries Commission, with the participation of related organizations, including the Steel Producers Association and the Iron Ore Association, as well as CEOs of large mining and steel companies.
*** The Mining Commission of the Iranian Chamber of Commerce has demanded that the coefficients be repaired and corrected
According to Gharghi, the Iranian Chamber of Commerce finally acknowledged the effects of mandatory pricing and lower than global rates on investment, reduced profitability of large mines and losses and closure of small mines, reduced productivity of steel plants and a serious threat to the iron and steel chain if the status quo continues. , Called for the correction and correction of coefficients. Accordingly, the price ratio for domestic steel ingots for iron ore will increase from 7.5 to 8.5, concentrate from 16 to 19, pellets from 23.5 to 26 and sponge iron from 50 to 53 percent.
In the end, he pointed out: It seems that the issue of choosing the Minister of Silence caused this ministry to postpone the decision in this regard until after the vote of confidence; We hope that Mr. Modarres Khiabani, after receiving a high vote of confidence from the members of parliament, will take steps towards the development of mines in the country, based on the existing expert opinions on the reform of previous past trends.
*** Reducing the demand for speculation in the steel market
A member of the board of directors of the Iranian Steel Producers Association said: “Steel prices have decreased in recent days and this issue is one of the positive results of recent decisions of the Ministry of Silence in managing steel demand. Public Relations of the Iranian Steel Producers Association, Seyed Reza Shahrestani said: One or two Last month, after Dr. Modarres Khiabani took office as the head of this ministry, fortunately, the demand for speculation and speculation is leaving the steel market, which resulted in a reduction in the price of steel both in the commodity exchange and on the market floor. Is.
He added: “In May, when the Deputy Minister of Mines of the Ministry of Silence was canceling transactions one after another, the demand for steel ingots in the commodity exchange reached more than 680,000 tons, but with the measures taken by Dr. Modarres Khiabani and his deputies in demand management,” We see that this figure has decreased by more than 35% in July and has reached about 450 thousand tons. Meanwhile, the demand for ingots has decreased to 124 thousand tons by August 20, which according to the remaining supply until the end of August, this number will probably reach a maximum of 350 thousand tons. In fact, with the right decisions, the demand for steel ingots has halved in less than two months, which means a reduction in the demand for speculation and brokerage for this product on the commodity exchange.
*** Supply management is also in the Ministry of Silence
A member of the board of directors of the Iranian Steel Producers Association noted: In addition to demand management, supply management is also being done in the Ministry of Silence, according to which the entire supply of sheets and most of the supply of ingots and rebars in the commodity exchange will be done. More and shorter intermediaries are leaving the steel market.
Shahrestani also clarified: to complete these positive measures, another task is needed and that is the implementation of the program of allocating sponge iron to induction smelting units because these units have not received almost any quota in the second quarter of this year and sponge iron producing units They have not been subject to the directive of the Ministry of Mines. Therefore, if these quotas are provided to induction smelting units at approved prices, these companies, which produce more than 4.5 million tons per year, can increase the supply of ingots on the commodity exchange.
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