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Monetary and Capital Market Exclusive, March 2004


 

Monetary and Capital Market in Iran

Chadormalu

Changing the Culture of Mining

Saeed Salimi,Managing Director of Chador Malu Mining and Industrial Complex

The existence of iron ore as the main raw material for steel production can be considered as an economic advantage and Iran Steel making companies have enjoyed this advantage which can bring about, not only a decrease in the expenditure of country’s exchange, but also have a basic role in decreasing the unit cost of the Steel Products.

History: Chador Malu mine was discovered in 1940, its geological operation started in 1963 and the detailed exploration phases ended in 1978. After establishment of the National Iranian Steel Company in 1979, the mine was handed over to the said company and it’s feasibility studies as well as detailed design works were conducted in cooperation with a German consultant and finished in 1992.

Measures related to tender, signing the contract for purchasing the production equipment and mining machinery were carried out during 1992 to 1994. Simultaneously, the operation for mine preparation and installation of industrial equipment and machinery were also started and the processing plant for the production of iron ore concentrate was commissioned in September 1996.

Subsequently the site was connected to the country’s railway network, and also the necessary power was supplied from the related network and finally the commercial production started in 1999.

Chador Malu Mining and Industrial Complex has been equipped for the production of iron ore concentrate as a large part of raw material consumptions of domestic steel making plants and also phosphor concentrate.
The complex is located in 180 kilometers northeast of Yazd city near Tabas highway.


Mine Specifications: Chador Malu mine is comprised of two northern deposits with the length of  1.7 km. Both deposits are separate in depth and show qualitative mineralogical changes. Exploitation of the mine is being carried out through open-roof, stepping method and the height of the steps is about 15m.
Specifications of the mine and quality of iron ore deposits of Chador Malu are as follows:

Mineral deposit: 399 million tons

Exploitable deposit: 320 million tons

Mine’s life: 30 years

Total end products: 227 million tons

Ratio of produced ore to unwanted rock: 1.1

Average iron purity: 55.2 percent

Average phosphorus purity: 0.94 percent

Average sulfur purity: 0.19 percent

Average oxidation grade: 4.02 percent


Shareholders of Chador Malu Mining and Industrial Company: Chador Malu Mining and Industrial Company which has recently turned into a public joint stock company was established to exploit Chador Malu mine and produce iron ore concentrate through an investment of about 500 billion Rials. Major shareholders of the company include Omid Investment Management Company, Mines and Metals Investment Development Company and Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).


Current Iron Ore Production and Development Plans: Chador Malu Mining and Industrial Company has three concentrate production lines and produces more than 4.2 million MT/Y. After establishment of the fourth line that would take three years, the company would be able to increase its annual production more than 5.6 million MT/Y, And also this company produces about one million tons Lump and Fine ore for blast furnaces of Isfahan Steel Company.

Various Products of Chador Malu Mining and Industrial Company:

The main products of the company include:

A) Iron oxide concentrate to supply part of needed iron ore for steel production units through direct reduction of iron ore (such as Mobarakeh Steel Company and Khuzestan Steel Company)

B) Graded iron ore (fine and lump) to be used for steel production through blast furnace method (such as Isfahan Steel Company)

C) Phosphorus Concentrate (apatite for producing chemical fertilizers and phosphoric acid.


Underway Projects:

Construction of Ardakan Pelletizing Plant: The iron ore is carry after exploitation to the concentration factory of Chador Malu Mining and Industrial Company for improvement of quality and
increase in purity. After making sure about the desirable purity and elimination of unwanted elements, it is turn into concentrate and is transfer to pellet production factories for production of pellet used by
direct reduction furnaces of domestic steel mills.

Pellet production factories could be established as a complex near or along the iron ore transport route. In addition to increasing the add value of the iron ore and making the project economically justifiable, they would play a great role in preventing pellet imports and outflow of foreign exchange as well as the creation of direct and indirect jobs and social developments in the region.


Location of the Project: The project is underway over about 780 hectares land 25 km west of Ardakan
city.


Objectives of the Project:

- Annual production of 3.4 million tons pellet needed for furnaces producing DRI (Direct Reduction Iron) needed by steel production units through direct reduction of Iron ore by natural gas (the current method used in Mobarakeh and Khozestan Steel Company)

- Existence of infrastructural installations including gas, electricity, water, paved roads and rail, manpower as well as proximity to stocks of needed raw materials and existence of suitable industrial cultural grounds in the region have made the project quite feasible.


Other Projects: In addition to the development plan and the project to establish a palletizing plant in Ardakan, Chador Malu Mining and Industrial Company is also participating to establish other plants to supply needed materials and parts for production lines and to take advantage of profit and added value
of its subsidiary products. These companies aim is to employ local manpower and encourage the private sector’s investments. When the projects become operational they would create profit making centers around production lines and meet a large part of the complex’s needs.


Kavir Phosphate Project: Chador Malu Mining and Industrial Company has launched a project for
producing phosphoric acid and chemical fertilizers in cooperation with the private sector to take better advantage of byproducts of iron ore concentrate production line. The factory is located in Bahabad, 60 km form the complex and of the project has started since March 2003. The first phase of the project would produce 3,000 tons phosphoric acid 8,500 tons chemical fertilizers.


Chemical Production Project: Chador Malu Mining and Industrial Company has launched a project for
producing chemicals needed for its concentrate production lines in Bahabad region in cooperation with the private sector to reduce transportation costs and provide easy access to those chemicals. When the project becomes operational, it would meet the major requirements of the company in relation to this chemical.


Mill Balls and Foundry Parts Production Project: Since foundry parts and mill balls are some of the major items used by production lines of iron ore concentrate factory in Chador Malu Company, Chador Malu Mining and Industrial Company has participated and supported the establishment of Bahabad Sannat Company in cooperation with the private sector to supply the above mentioned parts and reduce production costs.

Chador Malu Mining and Industrial Co.

No. 66, Esfandiar Blvd., Vali Asr Ave.,

Past Mirdamad St., Tehran,

Post Code 19686-53647 I. R. Iran

Tel.: +98 21 888 28 58

Fax: +98 21 877 59 35

E-mail: chadormaloo@chadormaloo.com

 

 

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  March 2004