During the recent years, the world has been watching the measures taken by the Iranian mines and metals sector to join the world industries. For metal processing, the country has received a highly positive response for cooperation. While some vital metals such as steel and copper are being led by their own national companies NISCO and NICICO, aluminum or ‘the future metal’ is yet to be led by such a head coordinator.
The most recent developments of the aluminum industry; IRALCO-Almahdi merger (National Iranian Aluminum Company) and appointment of Mr. H. Aghaie as the new chairman of the new company encouraged Iran International for an update on the subject. There was an interesting bottom line to Mr. Aghaie’s statements: The Iranian aluminum industry intends to supply 30% of the regional aluminum production. Here is our interview with the new chairman of IRALCO:

There are two five-year development plans in this regard. First, Almahdi Aluminum Complex has to reach the planned production capacity. Almahdi has been designed to operate with an annual output of 330,000 tons and facilities have been provided in terms of infrastructure, power generation, ship unloading equipment, berths and docks.
Once Almahdi has fulfilled its expected production capacity, the second five-year plan of the Ministry starts to expand the aluminum production capacity by an additional 200,000 tons. This achieved, Iran’s total production capacity of aluminum ingot should reach about 600,000 tons in ten years including IRALCO’s production. This figure is 100,000 tons above the estimated demands.

This ten-year plan particularly provides an outlook for investment in the development of Iranian aluminum industry. I believe the opportunity is unique for investment in this ambitious plan for both local and international investors. As a result, we are witnessing the enthusiastic response of potential investors for closing finance and buy-back deals especially on the development of Almahdi Complex.

Alumina is the basic material for manufacturing aluminum. The government has launched two projects to meet the demands. The first one is Jajarm Alumina Plant Project in Khorasan Province which has so far taken over $250 million of investment to produce an annual 280,000 tons of alumina. This plant is expected to be shortly operational as soon as some technical complications are settled. The second one is a pilot plan for the production of alumina from Nepheline Syenite in Azarbaijan Province, located northwest of Iran. This project is scheduled to be completed within the next five years.

The whole organization of the Iranian aluminum industry is subject to restructuring. All companies and subsidiaries involved in aluminum industry are intended to move under the umbrella of one giant holding regarded as National Iranian Aluminum Industries Company. The bases have been prepared for this reorganization and detailed drafts of the plan will soon be presented for final ratification and approval of the Ministry of Mines and Metals and the Supreme Administrative Council.
We believe that once this company is established, the Iranian aluminum industry will be headed by a headquarters that has the opportunity to devise policies for future developments free of the day-by-day problems associated with production operations.
While the management of affairs will be performed by this new company, the main investment is expected to be made by private investors. For example, more than 50% of the investment made in Almahdi Complex is made by local and foreign investors and the remaining shares which is less than 49% is held by Iran Aluminum Joint Stock Co. and National Iranian Copper Industries Co.

IRALCO is currently a company with 97% of its shares held by the government. It is expected to be gradually privatized as the Iranian aluminum industry undergoes restructuring.

All around the world, aluminum industry basically develops through international cooperation. This cooperation exists from the early stages of production up to the final stages of distribution and downstream activities. International partnership has been practiced in both Almahdi and IRALCO. Moreover, production of aluminum ingots is a normal process that will benefit all parties at the end. Investment in aluminum industry is a highly profitable one. The normal amount of investment required for production of one ton of aluminum is about $7,000. But in Iran, this figure comes down to $5,000 since many facilities are already provided. The Iranian aluminum industry continues to welcome international partnership especially with those partners who are willing to bring in their expertise. Here, transfer of technology is an advantage. A seminar is being planned for this purpose to introduce the investment opportunities of the Iranian aluminum industry. Issuing local and international participation bonds, and foreign direct investment are two of the major investment methods that the Iranian aluminum industry currently prefers.