The Iranian government is to launch a series of investment projects for the establishment of steel and aluminium plants in Bandar Abbas, which is the capital of the southern province of Hormozgan and also one of
Iran's main ports. The steel industry projects will be carried out under the aegis of IMIDRO (Iranian Mines & Mining Industries Development & Renovation Organization), which intends to make Bandar Abbas the main hub of the Iranian steel and aluminum industry.
The area in question is suitable for such projects since the
production of steel requires good supplies of electricity, gas and water, along with easy access to rail and sea transport, which are the best means of moving the heavy materials involved.The location of Bandar Abbas on the Persian Gulf will facilitate both the importation of the necessary raw materials, such as
iron ore, coal, bauxite etc., and also the exportation of the products of the new mills. As an additional favorable factor, there is currently an estimated potential demand in the Persian Gulf region for 13.5 million metric tons of steel.
So far, the economic advantages of Bandar Abbas have already attracted large volumes of foreign investment, in particular regarding the setting up of new steel plants. Indian companies, Tata and
Jindal, along with Ascotek from
Germany, have signed agreements for the establishment of steel plants in the area, with planned respective capacities of five, two and 1.5 million metric tons.
In addition to these new plants, a new joint-venture steel plant with the participation of the Indian steelmaker Essar as a foreign partner is to be launched by April in Bandar Abbas. Essar is to invest $900,000 in the plant with a total annual capacity of three million metric tons of
sponge iron planned for the first phase. The plant's capacity is set to increase to four million metric tons of billets per year during the last phase of the project.
Furthermore, the Iranian authorities intend to build up the necessary infrastructure at Bandar Abbas by increasing the capacity of the dock allocated to the mineral and steel industries. The capacity of the dock in question, which currently stands at six million metric tons per annum, is to be increased to 12 million metric tons.