EghtesadOnline: Iran didn’t need to take a cue from Saudi Arabia’s success with its Alcoa joint venture Ma’aden Aluminum smelter and downstream operations, as just about every Middle Eastern natural-gas producer with production to spare has invested in aluminum smelting as an easy win outlet for vast natural gas reserves.
According to an article by Metal Miner, exporting natural gas as liquefied natural gas is a profitable business, but building the infrastructure is costly.
An alternative is building an aluminum smelter, which is also costly but arguably yields a higher value add.
According to Aluminium Insider, state-owned holding the Iranian Mines and Mining Industries Development and Renovation Organization’s Amir Sabbagh told Platts the firm was in the midst of building a 300,000-ton per annum aluminum smelter in the southern coastal province of Bushehr.
Funding is still problematic for Iranian firms, so it is no surprise the Chinese are involved, with China Nonferrous Metal Industry’s Foreign Engineering and Construction Company largely footing the bill, Financial Tribune reported.
The country does not have sufficient alumina production to meet the new plant’s demands, so again the Chinese are further involved in talks to build a new 2-million-ton per annum alumina refinery in Asaluyeh, Bushehr Province. It is reported that the refinery is to be fed by bauxite imported from Iran’s long-term supplier, Alumina Company of Guinea in Conakry, Guinea.
Iran has an agreement to import 4 million tons/year of bauxite from Guinea until 2040.
The Platts article notes Iran’s present aluminum capacity is estimated to be 457,000 tons per annum (although it’s running at less than that). Plans are also in place to increase Jajarm plant of Iran Aluminum Company’s capacity by 36,000 tons, up from 220,000 tons.
Iran struggled to expand its natural-gas reserves during the years of sanctions, but now has access to more foreign technology and funds.
The country is estimated to hold the world’s second-largest reserves of natural gas after Russia, at nearly 18% of global reserves. Much of it is onshore and relatively accessible. China probably figures Iran is too good an opportunity to miss.
Iran’s three major aluminum producers had an aggregate output of 166,520 tons of aluminum ingots in the first six months of the current Iranian year (March 21-Sept. 22) to register a 4% decline year-on-year.
Iran Aluminum Company produced 84,238 tons, Hormozal Aluminum Company 52,193 tons and Almahdi Aluminum Company 30,089 tons.
Iran Alumina Company produced 121,858 tons of alumina powder during the same period, up 4% YOY.
H1 exports of aluminum from Iran stood at about 358,000 tons worth $228.16 million, up 95% and 44% respectively in weight and value YOY.
Despite local demand for alumina, IRALCO exported 17,000 tons of alumina powder to Central Asian countries in the first six months of the current Iranian year (March 21-Sept. 22), recently announced the governor of Jajarm City where the plant is located.
Ali Akbar Mohebbi explained that local alumina users’ payment delays prompted the state-owned alumina company to move away from local market toward exports.
“Almahdi and Hormozal aluminum companies are some of the oldest clients of Iran Alumina Company, but their inability to clear their debts has created liquidity issues for the alumina plant,” Mohebbi was quoted as saying by IRNA.
Established in 1996, Iran Alumina Company is located 150 kilometers south of Bojnourd City, the capital of North Khorasan Province.