The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     

May 2017, No. 83


IMIDRO Exclusive

Coal Reserves in Iran


Iran, in terms of diversity and the amount of mineral reserves, is among top mineral countries of the world. One of these reserves is coal.


Dr. Amir Khorami Shad, Deputy for planning and empowerment of IMIDRO

Coal is one of the oldest sources of energy supply. At their time, countries that had access to coal resources enjoyed high decision-making power in the industry and development. The purity of coal and depth of the mineral in those mines have been considered as one of their advantages and are still very important. The warming trend of the Planet Earth has diverted many countries, factories and production industries towards nuclear fuel or other hybrid energies but official statistics show that use of coal is still placed among materials top on the table of resources supplying energy in the world. Cheap price of coal has added to the demand by the markets of the emerging economies and taking advantage of clean fuels has been confined to the topic of different sessions by political leaders.

Using coal still constitutes 65 to 70 percent of the energy supply resources in India, China and the vast Southeast Asian countries, even it is predicted that due to the deep financial downturn in Europe and the United States, countries involved in the crisis have not much interest in making investment in the field of clean energies development and are extensively continuing import of coal.

Based on a report released by the IEA (International Energy Agency), coal consumption in the world will be almost doubled by 2030. On the basis of projections, coal consumption in OECD countries (countries outside the group of developed nations), will be increased by 81 percent. The share of coal out of the total energy consumption in the world will be increased to 27 percent by that date. According to the report, the global consumption of coal in that year, with almost two-fold increase would reach 6.1 billion tons.


Up to 2020, China will have the first say in this market but it is predicted that from 2020 onwards, Russia will take a significant share of the Chinese market.


China, Australia, US, Russia, India and South Africa are the main players in the coal market. Up to 2020, China will have the first say in this market but it is predicted that from 2020 onwards, Russia will take a significant share of the Chinese market.

The growing trend of coal price in the past year continued to the point that it was doubled and in the beginning of 2017 it is continuing its growth.

Chinaís trade performance in 2016 is indicative of the growth of imported commodities and this is good news for the mineral market. China in 2016 imported over 255.5 million tons of coal which shows an increase of 25.5% over the year before. In other words, the Chinese import 8.1 tons of coal per second which is separate from their domestic production.

Iran, in terms of diversity and the amount of mineral reserves, is among top mineral countries of the world. One of these reserves is coal. Iranís coal is divided into two groups in terms of consumption market. 1) Coke coal which is mainly consumed in the steel chain and 2) thermal coal which is mostly consumed in coal power plants.

The coke coal mainly supplies the demand of steel making factories with long furnace method and Isfahan Steel Mill is almost its sole customer. Of course, the MIDCO holding in a near future will join the club.

Other mines that can be found in Iran are oil and gas mines. These mines are so rich and economical that for their exploration, extraction, processing and selling an independent ministry called the Ministry of Petroleum has been established. The abundance of this valuable mineral material has caused the thermal coal mines in Iran to lose value. Therefore, use of thermal coal energy has no place in Iran. Some of the private sector producers export the extracted thermal coal. It is mainly exported to Turkey and East Europe.

As a whole, the coal market in Iran is not brisk and its main reason is due to the quality of domestic coal and its exclusive market. However, long-term forecasts indicate that coal would be reconsidered as a source of energy.

For optimum use of the coal resources, some suggestions that had previously been raised at the world level are being discussed again. One of these suggestions is the use of coal power plants in coal rich region in Iran, especially in the east and northeast parts of the country which have less access to energy resources such as natural gas. Those who offer the proposals believe that instead of transfer of gas to these regions, the substitute energy can be used and the anticipated gas can be exported.

Some other experts propose underground coal gasification (UCG) and production of methane gas by using oxygen injection method into the charcoal reserves, which is under study; yet some others consider transfer of coal to liquids (CTL). There are those who recommend development and improvement of the current methods and refer to the consumption of coal in thermal power plants and in the coal industry. However, the upstream organizations should simultaneously examine all the economic methods of coal.

On the basis of primary studies, the comprehensive coal plan which is being prepared by IMIDRO (Iranian Mines and Mining Development and Renovation Organization) and would be soon published, the general status of the scatterdness of coal mines in the country, coal washing and coke making workshops are as follows. Of course, there are small and scattered mines in other parts of the country that can be ignored and in case of need for the study and survey of coal mines, it is better not to be considered.

Global Coal Production Divided by Region

Major Coal Consuming Countries


China, Australia, US, Russia, India and South Africa are the main players in the coal market.


In Azarbaijan area there are 13 mines, in Gilan 2 mines, in East Alborz 64 mines and 3 coal washing factories, in Central Alborz 57 mines, 2 coal washing and one coke making factories, in Golestan 20 mines, in North Khorasan 1 mine, in Tehran 2 mines, in Tabas 33 mines, 5 coal washing and one coke making factories, in Kerman 25 mines, 4 coal washing and 3 coke making factories.

The current coal production methods in Iran are mostly traditional and based on the variety of its methods are as follows:

The traditional long labor front about 41% Ė the stepped down about 38% - digging and filling about 11% - outdoor about 4% - room and basics about 2% - upward stepped about 2% - mechanized long labor front about 1% and short labor front about 1%.

These statistics show that Iranís coal industry is in need of innovation and upgraded technology and the opportunity provided in the post-sanctions era should be used for the attraction of investor institutes and top technology companies.

At present Iranís coal production capacity is around 4.1 million tons. However, the potential capacity is suggested to be about 2.7 million tons. In 1394 (2015/2016) a total of 1.47 million tons of coal was produced in the country which, compared to the same period the year before (1.43) shows a slight growth. Predictions for production in 1395 (2016/2017) are a little more than 1.5 million tons with the upward trend of the previous year continuing.

Over the past 18 months, the world price of coal had a good growth, but due to some issues such as domestic supply and demand and the quality of domestic coal, the price growth had no significant impact on Iranís coal economy. Of course, coal mines in Iran, should pave the way for coal export and try to compensate for the problem of monopoly in the domestic market through export.

In the past year, 1.4% of the $4.4 billion imports in the mining and mineral industries sector went to coal and coke. In fact, the Isfahan Steel Mill imported almost half of its two million ton need for coal. In return, 1% of the $7 billion export in Iranís mine and mineral industries sector went to coal and coke, most of which was thermal coal.

Iranís coal reserves are more than 1.1 billion tons. If Iran is divided into four main coal-rich areas, the total coal reserves of the country will be as follows:

1) Coal-rich Tabas region with 866523 thousand tons

2) Coal-rich Central Alborz region with 133999 thousand tons

3) Coal-rich Kerman region with 93840 thousand tons

4) Coal-rich East Alborz region with 34676 thousand tons

5) Other coal-rich regions with 3685 thousand tons

The coal supply chain in Iran ends up to Zarand coke making in Kerman and Isfahan Steel Mill and this is the main problem in the economy of coal mines. Because, due to some kind of monopoly in the purchasing market as well as the poor economic situation of the exclusive purchaser, financial problems have bothered coal companies. In a simple way, this cycle in various sectors is as follows. 

Kerman

In the first category, Pabdana, Hashouni, Hamkaar, Khomroud and Assadabad mines transfer their products (gaseous) to the Pabdana group. In the second category, Bab Nizoo, Hajdak, Eshkeli, Darbid Khoon, Darreh Gaz and Sarapardeh mines transfer their products (coke) to the Bab Nizoo group and then the two groups send the products to the coal washing factory. The product has the potential to be sent to Isfahan Steel Mill and Zarand coke making. 

Eastern Alborz Mines

In Shahroud region, Tazreh, Kolriz and Razmja mines Ė and in Golestan region, the winter mines of Yurt, Takht, Razi, Malach Aram and Joozchal send their products to Mehmandoost coal washing factory. In continuation, the product chain can be ceded to Zarand coke making and Isfahan Steel Mill. 

Parvadeh Mines

Parvadeh Companyís coal mines include Parvadeh 1 and the Central Mine as well as special mines of the Parvadeh region including Negin, Madanjoo and Arvin Novin mines which send their products to the coal washing of Parvadeh 1. This chain also ends up in Isfahan Steel Mill and Zarand coke making. 

Central Alborz Mines

In the Central Alborz region, Kaar Mozd, Kiasar, Karsang and Goliran mines send their products to the Central Alborz coal washing factory and the chain finally ends up in Isfahan Steel Mill and Zarand coke making.

The total number of active mines in the country in 1394 (2015/2016) was 7087 of which 197 or 1.68% were coal mines.

Based on the prospect of the countryís steel and the steel comprehensive plan, in case of realization of 55 million tons of steel, the share of production in long kiln method will be about 6 million tons. With the assumption of the amount of coke consumption at a norm of 550 km for each ton of cast iron in long kiln and 22 kg for each ton of steel in EAF method, we need 6.2 million tons of concentrated coal.

Coke production capacity in the event of implementation of development projects will be 4.3 million tons. The amount of coke needed, based on the figures in the 1404 (2025) Vision Plan, is 4.3 million tons. The required amount of the concentrates in the Vision Plan has been estimated at 6.2 million tons, but in case of implementation of development plans for production of coal concentrate, we will manage to produce only 4.6 million tons of coal concentrate. Therefore, we will have a shortage of about 1.6 million tons of coal concentrate.

Based on the forecasts for the production of coal concentrates in the country in the 1404 Vision Plan, the coal-rich Kerman regions will have 1300 thousand tons, Tabas coal-rich region 2500 thousand tons, East Alborz coal-rich region 450 thousand tons and Central Alborz coal-rich region 350 thousand tons of concentrates. On the basis of the comprehensive steel and coal plan in the Vision Plan 1404 in the Tabas region about 4 million tons, Kerman region about 2 million tons, the Central Alborz region about 560 thousand tons and Eastern Alborz region about 720 thousand tons and in total about 7.3 million tons of crude coal will be produced.

For the supply of coal transferred to coke, the first priority will be Tabas with over 324 million tons of extractable reserves.

And in the case of the opening of coal power plants in the country, up to the Vision Plan 1404 in total we will need 8.6 million tons of thermal coal anually.

With the above-mentioned calculations and the quality of Iranís reserves, import of 15 to 20 percent of high quality coal concentrate should be included on the agenda. Therefore, for the power plant purposes and the steel comprehensive plan, Iranís coal industry is in need of sound implementation of development plans and definition of new projects. Iran should advance coal mines to mechanized methods and take advantage of modern technologies in line with increasing the quality of produced coal.

With regard to the growing world prices of coal and the amount of Iranís reserves as well as relative advantage of mine possessing in Iran, such as proper wages, skilled mining manpower, access to international waters, domestic and regional needs for this mineral substance, government support for investment in the coal sector and other supports for foreign investors, Iran enjoys appropriate conditions for investors in the field of coal.

For presence in the coal mines of Iran, you can contact the Mining Management Department at the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) or Iran Mineral Production and Supply Company.

 

Subscribe to
IRAN INTERNATIONAL

CURRENT ISSUE
   
  May 2017
No. 83