During President Hassan Rouhani’s recent European tour which [took him to France and Italy], Iran's Mobarakeh Steel Company (MSC) and Italian firms inked cooperation documents to carry out three development projects at MSC.

As for the €900 million worth of documents his company singed with the Italian firms, MSC Managing Director Bahram Sobhani, Ph.D., said that the development projects had already been designed for the subsidiaries of Mobarakeh Steel Complex – namely Hormozgan Steel Company, Sefid Dasht Steel Complex and Shahid Kharrazi Project (Direct Reduction Mega-module).

Given the fact that the Iran nuclear deal [the Joint Comprehensive Plan of Action (JCPOA)] was close to bear fruit, he said, we at MSC tried since about one year ago to make planning for negotiations with foreign partners over the questions Mobarakeh Steel Company had in mind.   

Dr. Sobhani further said that our goals were clear and specific, so were our plans for the development of Sefid Dasht Steel Complex or Hormozgan Steel Company, as well as our decision for what to do at Mobarakeh Steel Company.  
“An economic delegation comprising businessmen and managers of Iran’s giant companies in the areas of oil, gas, petrochemistry and steel – among them: the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) and Mobarakeh Steel Company – accompanied Mr. Rouhani on his trip which was his first official visit to Europe following the [conclusion of] JCPOA. The representatives of these companies took part in different events and seized the opportunity that opened up during the course of the trip to ink the primary deals of the development projects.”

The MSC chief went on to elaborate on the projects the Iranian and Italian firms agreed to work on and said that development of Sefid Dasht Steel Complex is part of these projects, adding the agreement envisions one million tons of thin plate and continuous rolling applying the same technology Saba Steel Complex uses.

Another project focuses on development of MSC’s Shahid Kharrazi Hot Rolling [mill] to raise its production capacity to three million tons a year, he said, adding that based on the third deal, the two sides have agreed to develop Hormozgan Steel Company in two ways: improvement of the current unit and creation of a new unit to raise its production volume to three million tons a year from the current 1.5 tons.

“Mobarakeh Steel Company and big foreign companies – European companies in general and Italian firms in particular – agreed on the general outlines and implementation of these three projects. In order to seize the existing opportunity and tap into the foreign finances dedicated to Iranian projects during the president’s trip, we reached an agreement with the other side on the frameworks of these three deals which together absorb more than €900 million in finances. The exact amount of finances will be fixed after we go through final stages.”

The MSC managing director referred to how the three projects are to be implemented after the primary agreement and said that we have reached agreement and inked the initial deals. “It is natural that we move forward step by step before these projects are finalized.

“Reports on the technological and economic justifiability [of such projects] should be pieced together, the agent bank should be picked and a report [on the projects] should be submitted to it, and approval of the Central Bank of Iran (CBI) should be obtained and communicated to the Italian banks and insurance companies to be endorsed.        
“The fact of the matter is that we are ahead of time by taking care of preliminary measures. In the first phase, we could include these [three] projects in the quota allocated for finances. As I’ve already said we are ahead of schedule thanks to what has played out so far and the agreements we have struck. This helps wrap up the projects and make them operational sooner than expected,” he stated.

As for the upsides of these projects, Dr. Sobhani said what matters here is the fact that the implementation of these three projects will help create jobs and shore up production in these three units. On top of that, he added, the development projects will earn the [Iranian] companies some revenues.

The MSC chief then highlighted the importance of efforts to implement these projects building on domestic potential and said that based on these agreements Iran will reap maximal benefits from launching these projects. “In other words, foreign funds will be channeled into Iran in the form of finance and Iran – under the agreements it has inked with its foreign partners – will proceed with the lion’s share of the construction phase of the projects by tapping into its domestic potential.

“This will materialize with Iranian companies getting involved in building and supplying equipment and with contracting firms working on construction [of units] and installation of equipment.

“It is true that the finances needed for these projects will be provided by the foreign side, but a big number of domestic contractors will be involved in the projects. God willing, more detailed information will be given to our colleagues and fellow Iranians in our next reports,” Dr. Sobhani concluded.