Iran is one of the richest countries in the mining sector around the world. Chadormalu Co. is among major companies in the field of producing iron ore concentrate. Nowadays, Department of Environment (DOE) issued the permission of primary discoveries in D19, one of the mines which has been discovered recently in Iran. According to Mohammadreza Bahraman, the head of Iran Mine House, finally it would be possible to initiate exploration in order to get a better estimate of potential capacity available in this mine.
It’s interesting news for Chadormalu (Known as CHML1 in Tehran Stock Exchange) because its current mine reserves could be exploited just for around another six more years. Considering Iran’s 20-year vision plan in steel industry in order to reach 55 million tons production in 2025, totally 150 million tons of iron ore is required to be produced therefore each company should produce more proportionately, including Chadormalu. According to last survey, Iran’s iron ore probable reserves are around 5.1 billion tons, which 3 billion tons of them are proved reserves. These proved reserves are expected to be exploitable only for less than another 20 years. As a result, Iran needs to produce 600 million tons per five years to prevent encountering lack of supply in iron ore and subsequently steel chain.
D19 is located in Ardakan, a town in Yazd province that is 180 kilometers far from Yazd and near other current Chadormalu’s mines. In 2015, Chadormalu and Iran Central Iron Ore Co(ICIOC), won exploitation of this mine in a tender which held by ministry of industry, mine and trade. Primary study shows that there are around 100 million tons reserves of iron ore in D19 and it is expected that the reserves should be more than this. Unfortunately, because D19 is near the home of one of the endangered species which is Iranian cheetah and it is a protected area by Department of Environment(DOE) and according to the Iranian law, DOE is in charge of allowing any exploration activity in these protected areas. Chadormalu’s CEO said the company is obligated to concern about environmental issues and implement plans to preserve this species. He noted this after he got the permission by DOE for new exploration.
In addition, as we discussed about major problems in Iron Ore industry in Iran in the article of “Major Problems in Iron Ore Industry in Iran”, that one of the predicament of iron ore mining companies is governmental interference in pricing. Because iron ore prices in Iran could not soar as prices in international markets, Chadormalu is not able to gain same as international companies. As a matter of fact, domestic iron ore price has not followed the supply/demand mechanism, its price is based on 13% of average price of billet traded in the Tehran Stock Exchange, by this way, it’s an unfair mechanism. Mentioned article discussed about iron ore pricing in detail. Nowadays, Iran has a plan to lift governmental control on iron ore pricing. It would be amazing news for Chadormalu not only by producing more and completing the steel chain, but also by abolishing governmental control on iron ore pricing in the domestic market. By this way, discovering D19 is a vital project for Chadormaul.
At the moment, Chadormalu’s capacity is around 3.5 million tons in pellets, 1.5 million tons in granulated iron ore and 10 million tons in iron ore concentrated, and its mine could support for about 5 to 6 more years, as a result, D19 would be a real blessing for Chadormalu.
To put it in a nutshell, issuance permission for prime exploration in D19 is vital step not only for Chadormalu, but also for all steel chain in Iran. Due to many high graded iron mines located in declared protected areas by Department of Environment, mining companies are able to promote their plans without any environmental damage by implementing green mining and regarding environmental issues.
