The Forum for Partners in Iran's Marketplace

December 2016, No. 81

IMIDRO Exclusive

IMIDRO’s Development in Last Three Years

IMIDRO is defined as the leading and most effective development organization in the field of mine and mining industry.

The Status of IMIDRO at the End of 10th Government and Major Decisions Reached Under the 11th Government

At the beginning of Government of Prudence and Hope, IMIDRO was the heir of 47 plans. Of these, 12 projects were active and semi-active while 35 projects were inactive. It was an unpleasant situation for an umbrella organization like IMIDRO, posing a threat to its reputation.

In spite of facing financial problems, the organization managed to carry out its plans in the new era of its activities.

Following the appointment of Mohammad Reza Nematzadeh as Minister of Industry, Mine and Trade, the responsibility of the leading organization of the ministry was entrusted to Dr. Mehdi Karbasian. IMIDRO was rooted in Ministry of Mines and Metals and is a part of the Ministry of Heavy Industry, thus it bears weighty economic and social responsibilities.

First, Karbasian gave an order to develop two strategies. The first strategy was supposed to be drawn up within three weeks to formulate a plan of the first year, whilst the second one was a medium and long-term strategy presented for the coming three years. A change in management style is clear indicating a profound wisdom in decision-makingIMIDRO devised its structure, accelerated its rules and started a new chapter without making a change in its human capital.

This chapter made IMIDRO sufficiently stable and the scientific decision-making based on technical and economic feasibility studies paved the way for the development of the mine and mining industry sector, as well as creating full-time employment.

First, the eight provincial steel projects were evaluated. A plan was ceded completely to the private sector. A new initiative was introduced to add to the methods of financing IMIDRO. By attracting private sector participation, 7 other projects were undertaken as joint ventures with private sector entrepreneurs. Accordingly, the crisis in steel projects was handled and the plans were undertaken.

Alumina production from Nepheline Syenite project was a long-awaited project (nearly three decades), halting repeatedly due to various reasons.

Finally, in December 2014, IMIDRO entered into a contract with Outotec for the basic design of the plan. The infrastructure of the project has been implemented and the project, with an annual production capacity of 200 thousand tons of alumina powder and 150 thousand tons of industrial salt, will be launched in a coming future. On the other hand,   Azar Shahr pilot which was set for the trial production of Nepheline Syenite underwent a change of use and will be utilized for the production of boehmite.

South Aluminum Plan has become operational since January 2015.The project will be the largest aluminum producing unit in the country. Land, gas and other infrastructure is provided and the project is undertaken by a Chinese company. Accordingly, the first aluminum bars will be offered in the market.

The contract of the first phase of Jajarm Aluminum Plant, enjoying 37 thousand ton production capacity, is signed and the project has witnessed a remarkable progress.

One of the major projects to be operational in this period was Mehdi Abad Lead and Zinc Plan. Despite being one of the largest mines in the world, it had been overlooked for a long time.

Thanks to accurate planning, the problems with the former investor were solved and 7 industrialized countries tendered for the project. Finally, a consortium managed to obtain the project.

The tender is considered as one of the most successful examples of overseas contract in the country. The section allocated to barite in the mine is launched in 2013 and is purchasing the product so far. The project will produce 800 thousand tons of zinc, as well as 80 thousand tons of lead and silver concentrates. Consequently, 1,000 job opportunities will be created.

Some other projects to become operational include Graphite Electrodes, Sefidabeh Antimony, Hormoz and Hormozan plant, Zarshuran Gold, Khur and Biabanak Potash, Zarand Tar Refinery,  four iron ore and pellet projects in Sangan, Energy Intensive Industrial Special Economic Zone, Kahnuj Titanium Processing, Equipment of Gol-e Gohar Mines (4-5 – 6), Khomrud Iron Ore and Green Coke.

Plans Set out in 11th Government and Projects Ahead

IMIDRO is defined as the leading and most effective development organization in the field of mine and mining industry. The organization has remarkably increased the production capacity of the country in the past 15 years, ceding a great number of its subsidiaries’ share in a privatization plan.

Some of these companies include Mobarakeh Steel Co., Khuzestan Steel Co., Iran Aluminum Co., Hormozal Aluminum Co., Al-Mahdi Aluminum Co., National Iranian Copper Industries Co., and several companies producing lead, zinc, cement and other products.
IMIDRO has launched more than 110 projects valued at over $ 13 billion in the last 15 years.

In spite of facing financial problems, the organization managed to carry out its plans in the new era of its activities.

There has been some modification in the organizations’ financial plan in 2014 and by defining new financing methods, top priority was given to domestic and foreign investment.

Subsequently, the first phase of Zarshuran Gold and Cerro-azul Cement (Venezuela) plans were become operational in 2014-15.

Meanwhile, semi-stopped and halted plans were activated as a result of adopting various financial methods.

In 2014, nine projects including Sangan Iron Ore Concentrate (Khorasan Steel Complex), Sangan Pelletizing (Tose-e Melli ), Savad Kouh Coal and Jalalabad Iron Ore Beneficiation were started and entered into the operational phase.

IMIDRO’s measures in 2015 has led to inauguration of 6 projects such as Zarand Tar Refinery, the second phase of Persian Gulf Mining and Metal Industries Special Economic Zone, as well as executing the extraction and sale contract of Gol-e-Gohar 5. During the same period, 15 new projects were carried out due to effective measures and investments. Makran Steel, South Aluminum, Sangan Concentrate (Mobarakeh Steel) and the production of rare earth elements and strategic metals are some examples of these projects.

In the current year, 28 projects will be inaugurated and become operational. Likewise, the result of projects undertaken in 2013 was revealed helping various provinces of Iran in achieving sustainable employment. Some of the projects include: Sefidabeh Antimony (Sistan and Baluchestan), Sponge Iron Project (Chaharmahal and Bakhtiari), Shadegan Sponge Iron Project (Khuzestan), Neyriz Sponge Iron Project (Fars), the first phase of Jajarm Aluminum (North Khorasan) and Kahnuj Titanium Pilot (Kerman).

By March 2018, the organization will inaugurate and carry out 12 projects, while 5 projects will be put in to operation. In total, 73 projects will be added to the country’s undertaken plans by March 2020.

The plans include Chabahar Aluminum, Alumina Production from Nepheline Syenite, Magnesium Oxide production from Salt Lake (Qom), Jetty of Parsian Energy Intensive Industrial Special Economic Zone, as well as Parvadeh 4 Coal.

Launching the projects in “Prudence and Hope” government

In 2016, over $1420 million investment will be made to launch and undertake 28 projects. In the following year, an investment of $ 1,000 million will pave the way for the operation of 12 projects, increasing the production capacity of the country.

In addition, enjoying $4390 million investment, 17 projects will be launched in 2018 and 8 projects, with $ 3,300 million investment, will be completed and inaugurated.

In other words, 73 projects ($ 11 billion investment) are to be inaugurated and put into operation in 2014-20, creating 8,500 direct and 12,000 indirect job opportunities. Of these, 20 projects are undertaken before 2014 and 53 plans are launched afterward, establishing IMIDRO’s position as a development-oriented organization in the field of mines and mining industry all over the world.

If foreign investors intend to participate in the projects, the organization will offer new projects.

Iran is rich in great underground reserves and energy. The country’s access to high seas and regional market opens up the opportunity of developing major economic plans.

Due to the drawn up plans, energy intensive industrial special economic zones, Lamerd and Parsian, on the southern coast of the country, will allocate land to the ones interested in investment. The area will turn into a major hub for the production of steel, cement, aluminum and petrochemical products in the region.

One Billion Dollars Investment in 10 Projects by 2015

Since 2013, IMIDRO made a great attempt to finalize the projects having optimum condition. Thus expert and operational teams were formed and the plan was realized thanks to the attendance of the senior managers. Subsequently, the organization launched 10 projects, valued at one billion dollars, by September 16.

These projects include Zarshuran Gold, Venezuela Cement, Al-Mahdi Rodding, Petroleum Coke Pilot, Second Phase of Jetty Project-P.G.S.E.Z, Khur and Biabanak Potash, Zarand Tar Refinery, Sarcheshmeh Concentration Plan (Phase 2), Songoon Concentration Plan (Phase 2), as well as 13 power transmission and road construction projects as the infrastructure development plans in the area of mineral regions in Iran.

Development of Financing Methods in IMIDRO

In the current year, 28 projects will be inaugurated and become operational. Likewise, the result of projects undertaken in 2013 was revealed helping various provinces of Iran in achieving sustainable employment.

In new era of development in the mine and mining industry sector associated with the beginning of the Eleventh Government, IMIDRO faced with financial challenges. A part of the organization’s assets was ceded not only in a privatization project, but also as a compensation of the government’s debt to non-specialized companies. This measure has resulted in a decrease in the income of the organization and caused some policy making problems. Some of the shareholders were seeking maximum interest and were not familiar with the concept of development and investment in this area.

Following numerous changes in IMIDRO’s senior management position in the Tenth Government, the subsequent government came to the conclusion to appoint a person of great knowledge in financing, sustainable development, as well as international relation issues . Consequently, Mehdi Karbasian was assigned and the term of stability began in IMIDRO.

IMIDRO has adopted new financial methods and made some changes in the strategies and quality policies.

In his new approaches, Karbasian clearly addressed the officials to increase the income and resources of the organization, decrease the costs and expenses and finally devote their attentions to the participation in the required fields.

Some of the new financing methods are as follows:

·         Cooperation with committed and expert firms in private sector so that a percentage of stocks will be allocated to the development of partnership with the sector. As a result, a significant percentage of the construction costs of the projects will be transferred to private investors. Instead, the plans will be undertaken and the specialized private sector will also obtain benefits. The projects include 7 Provincial Steel plans such as Neyriz Steel, Shadegan Steel, Mianeh Steel, Sepid Dasht Steel and others.

·         Selling government bonds in order to implement a great number of projects

·         Attracting foreign investors and their participation in the plans. One of the best procedures was forming Mehdi Abad Consortium. The projects such as South Aluminum, Green Coke and Makran Steel will be set up through foreign investors

·         Arranging for foreign loans as well as attracting the participation of  Iranian investors living  abroad are other financial methods under study.          


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  December 2016
No. 81