iraj salehi iran's steel development facts & investment promoting projects

Istanbul Turkey, Sep. 2015

2nd Iran Steel ExportPerspectives Conference

Iran’s Steel Development Facts&

Investment Promoting Projects

Brief Introduction of Barsoo Engineering Co.

Istanbul Turkey, Sep. 20152nd Iran Steel Export Perspectives Conference

Barsoo, founded in 1993, has been the pioneer in providing consulting engineering services in Iran. The company offers integrated front end engineering design and consulting services in a wide range of sectors like iron and steel, ferro alloys, electric power and utilities and ‑wastewater, infrastructure and other allied industries.

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Scope of ServicesFeasibility (techno- economical) studies, market study

Procurement management

Design and detailed engineering

Industrial buildings, facilities and infrastructure design

Execution of turn-key / EPC projects

Inspection services

Supervision services

Project management (MC)4


Certificates and Memberships

Quality management system / ISO 9001:2008 / TÜV Certificate, valid up to 2018

Project management system based on PMBOK

Certificate of eligibility for consulting services /Iran MPO

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Fields of ActivityBase Metalsand Minerals ProcessingInfrastructuresand Off-Site FacilitiesPower Plants, Transmission and DistributionOil, Gas and Petrochemicals

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Projects Distribution in Iran

Iran’s Steel Development Facts


According to National plan for development of steel production, based on target consumption per capita of 480 kg,

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At 2025, 42 MTPA crude steel shall be produced With consideration of 13 MTPA, export target, total annual production capacity of the Country shall be reached to 55 MTPA

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Predominate route of steel development

Based on:• Non-availability of enough coking coal• Non- availability of enough scrap• Huge available sources of Natural gas

with considerably low price

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• Nature of iron ore mines of the Country

Main route of steel development is decided to be Direct Reduction -Electric steel making (DR- EAF)

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DR- EAF Route


So, from 55 MTPA, Target Value of crude steel, 49 MTPA through DR-EAF route, 6 MTPA through Blast Furnace (BF) & Basic Oxygen Furnace (BOF) i.e BF-BOF route would be produced

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BF- BOF Route


Steel development locations

Based on:• Serious issue of dry climate of the

Country and so low water resources• Access to international marine

transportation16


Considered locations are:

• Beside big iron ore mines of the Country, preferably, for beneficiation & pelletizing

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• Beside south coasts of the Country (Persian Gulf & Oman Sea) for direct reduction, steel making & hot rolling

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For realization of National plan

Target capacities of steel production chain material have been defined

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Scrap DRI Pellet Lump Ore Fine ore Concentrate0

10

20

30

40

50

60

70

80

6.6

51

74

37.2

74Target Capacities, 2025

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Considering:Total expected capacities to be realized at 2025, shortages, of the steel production chain material would be as follow:

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• Pellet 3 MTPA

• Concentrate 9 MTPA

• Lump & fine Ore 3.5

MTPA

• Coking quality coal 1.5 MTPA

• Scrap 2.6 MTPA 24

Investment opportunities

in Iran Steel Industries


Potential fields of investment

• Exploration & development of new iron ore mines • Iron ore beneficiation lines beside new

developed mines

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• Scrap processing plants• Production of refectory material• Production of graphite electrode• Ferro alloys production• Lime & dolomite production lines• Construction of new power plants

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Investment promoting projects


For realization of target capacity of 55 MTPA crude steel, The holding for State investment, i.e. Iranian Mines and mining Industries Renovation & Development Organization (IMIDRO)

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Is promoting investment of Iranian private sector and would welcome to Foreign investors for:

• Production of indicated shortages• Production of additives & consuming materials

3, High Priority, investment “packages” are introduced in this presentation

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10 MTPA, Mega Steel

Green Field, project

To be developed by IMIDRO with foreign & local strong investors


Available infrastructure, advantages & incentives

• Port facilities beside high depth areas of Oman sea suitable for raw material handling by 250-400 thousand tons bulk carriers

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• Rail way connection to National network & Pakistan

• Best location for transit of goods to Afghanistan & CIS countries

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• Natural gas pipe line

• Availability of highly experienced & skilled managers, experts & operators in the Country

• Tax exemption

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Target

10 MTPA, raw material, semis & finished productsMostly for improving balance of steel production chain material and assurance of 2025 National plan realization

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Production route, concept, Capacities

& sequence of Investment


0.03 MTPA

Stacking , Blending and Reclaiming of raw materials

Stage 1 Stage 2

Ship & Wagon and Truck Unloading

Concentrate

Stacking & Reclaiming

Stage 1Stage 2Stage 3

Pelletizing Plant

6.3 MTPA

Bandar Abbas & Bandar Emam

Scarp

Bille

t cas

ting

One

line

High

spee

d

reba

r

Conti

nuou

s Rol

ling

Rebar0.5 MTPA

HBI 0 (1.7) [1.125] MTPA

Beneficiation1st Line

2.1 MTPA

Beneficiation2nd Line

2.1 MTPA

Beneficiation3rd line

2.1 MTPA

Pellet Stacking & Reclaiming

0.51 MTPABillet

0.56 MTPAHDRI / HBI / CDRI

0.52 MTPA

Direct ReductionMega Module

1.7 MTPA

Pellet0 (2.5) [2.5] MTPA

Pellet6.3 (3.8) [3.8] MTPA

Bandar Abbas

Concentrate0 (2.5) [5] MTPA

Imported Iron

Concentrate2.1 (2.1) [2.1] MTPABy Vessel

Local Iron Ore6.15 (9.2) [9.2] MTPA

Imported Iron Concentrate0(0.4) [2.9] MTPA

From Afghanistan By Rail

MeltingNo.1

Mega Steel Project

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Products(Final Stage)• Concentrate 5 MTPA• Pellet 3.8 MTPA• HBI 1.125 MTPA• Rebar 0.5 MTPA

Total 10 MTPA

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Required UtilitiesDescription Final

Stage

Electricity, Installed Power (MW) 200Water (M3/Hr) 1000N.Gas (Nm3/Hr) 92000

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Investment & Economic IndicesDescription Phase 1 Phase 2 Phase 3

Investment (MEuro) 950 1200 1500Internal Rate of Return)%( 18 22 21Break-even point)%( 44 35 40

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2.5 MTPA, Pellet ProductionFrom rather low grade Iron Ore of small scale mines of the CountryGreen field Project


Small Scale Mines statisticsDescription Quantities

Total Registered Mines 194 unitsTotal Active Mines 150 unitsMineable Reserve of All Mines 250 Million TonesMineable Reserve of Active Mines 150 Million TonesAnnual Iron Ore Production, 2013 32 Million TonesTotal Employees of Active Mines 8000 Persons

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Main Location of the MinesProvince No. of Active

MinesMineable Reserve

(Million Tons)

Khorasan 50 48

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Hormozgan 7 19Kerman 18 19Yazd 10 16Fars 10 12Central province 10 11Zanjan 18 9Isfahan 13 7West Azarbaijan 5 5Other provinces 9 4The Country 150 150


1

23

4 5

Final Beneficiation &

Pellet Plant (FB & PP)

• Small Mines1-55 Primary Beneficiation Centres (PBC)

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Khorasan Province

Two PBC

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Kerman Province

One PBC

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Isfahan Province

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One PBC


One PBC

49

Hormozgan Province


Required UtilitiesDescription PBC FB & PP Whole

package

Electricity, Installed Power

(MW)2 60 70

Water (m3/Hr) 1 175 180N.Gas (Nm3/Hr) - 1000

010000

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Investment & Economic IndicesDescription PBC FB & PP Whole

package

Investment (MEuro) 4 230 250Internal Rate of Return)%( 26.6 23.2 26Break-even point)%( 31 39 33

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Investment can be realized either through6 Investors5 Investors of 5 PBC1 Investor of FB & PPOr1 InvestorFor the whole “Package” of 5 PBC and FB &PP

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225000 TPA Ferro manganese(3x75000 or 2x112500)Green field project(s)


General viability• Assured local market based on 2025 National

Target plan of 55 MTPA crude steel production

• Potential export market to MENA & Europe Countries, because of so high Energy Consumption & Considerable low Prices of energy in the Country

• Existing production, marketing and export experiences & expertize

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Demand Production Balance0

100

200

300

400

500 470

250220

Local Market Statistics

Ferro Manganese

55

* 1000 Tons


Ferroalloy Process

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Required Utilities(For 1x75000 TPA, Fe Mn Plant)

Description Quantity

Electricity, Installed Power (MW) 30Water (M3/Hr) 10N.Gas (Nm3/Hr) 500

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Investment & Economic Indices(For 1x75000 TPA, Fe Mn Plant)

Description Quantity

Investment, Accumulative (MEuro) 60Internal Rate of Return)%( 32Break-even point)%( 29

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Investment can be realized either by:

3 investors for establishment of 3x75000 TPA production plants in 3 locations

Or by:

2 investors for establishment of 2x112500 TPA tons production plants in 2 locations

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Thanks to

• All participants for their kind attention

• Metal expert for well arrangement of the Conference

• Turkish participants in the Conference for their hospitality

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iraj salehi iran's steel development facts & investment promoting projects

Economy & Finance