Steel Production Capacity Reaches 31m Tons p.a.

With the first development phase of Kish South Kaveh Steel Company going on stream, domestic crude steel production capacity has reached 31 million tons per annum, Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh said.

The first phase of SKSCO, with a 1.2 million-ton capacity per year, was inaugurated on Tuesday in the presence of First Vice President Es'haq Jahangiri in the Persian Gulf Mining and Metal Industrial Special Economic Zone located in Hormozgan Province.

The PGSEZ is one of Iran’s most ideal locations for the development of the steel industry. It presents many advantages for steel mills such as its strategic location near high seas, which not only reduces transportation costs and facilitates exports, but also helps meet the huge water requirements of the industry.

The establishment of the new steel plant brings Iran closer to materializing the steel production goals set in the 20-Year Vision Plan (2005-25). The plan stipulates reaching a production capacity of 55 million tons of crude steel per year by the end of 2025.

SKSCO has been founded with an investment of $270 million by Kaveh Pars Mining Industries Development Holding Company, which is a subsidiary of the Mostazafan Foundation of Islamic Revolution, one of the largest holding companies in the Middle East, IRNA reported.

The steel complex will produce various types of billets and low, mild and high-carbon steel as well as alloys of the industrial material, according to Mohammad Atabak, managing director of Kaveh Pars holding.

"SKSCO’s feedstock consists of 80% direct-reduced iron and 20% scrap iron," he said.

The first phase of SKSCO’s desalination plant with a daily output capacity of 15,000 cubic meters was also completed alongside the first phase of the steel plant.

Atabak said the desalination plant’s final operating capacity is set to be 55,000 cubic meters.

Nematzadeh said the second phase of the project, which also includes a pellet-making plant with an annual 4 million-ton capacity, is nearly 40% complete and is in the process of equipment and machinery installation.

The project will be finalized during the next Iranian year (March 2017-18).

The minister noted that there are currently 19 steel projects under construction across the country, the establishment of which will add 10 million tons of pellets, 5 million tons of sponge iron and 3 million tons of crude steelmaking capacity to the steelmaking chain next year.

IMIDRO data show Iranian steel mills’ production capacity for crude steel and steel products reached 23.4 million tons and 34.1 million tons respectively by the end of the previous Iranian year (March 19, 2015).