EghtesadOnline: Iran’s largest steel exporter Khouzestan Steel Company has successfully bought majority shares in a major mineral holding, moving toward self-sufficiency in the steel production chain.
It has acquired a 67% stake in National Industrial and Mineral Development Company, a subsidiary of Bank Melli’s investment arm Tosee Melli Group Investment Company, worth a total of 12.4 trillion rials ($258.5 million). The shares were put up for auction by TMGIC.
NIMIDCO has two iron ore concentrate and pellet-making plants in the mineral-rich zone Sangan located in Khorasan Razavi Province.
KSC’s acquired stake in NIMIDCO enables it to take control of the two 2.5-million-ton per year pellet and concentrate plants, and cooperate in the construction of a second 2.5-million-ton per year pellet plant, which is slated to come on stream in the next fiscal year (March 21, 2018-19), according to Financial Tribune.
“We are planning to buy a mine, buy or cooperate in establishing a concentrate plant, and also purchase or construct rolling mills for downstream development,” KSC’s Managing Director Mohammad Keshani told Chilan Online earlier this month.
Khouzestan Steel Company has had a good fiscal year so far, as its sales have jumped 50.22% year-on-year to 62.95 trillion rials ($1.39 billion) in the first 11 months of the current fiscal year (March 21-Feb. 19). Exports made up 2.5 million tons of total sales valued at 46.81 trillion rials ($951.46 million).
NIMIDCO’s parent company has recently gone on a downsizing spree by selling its shares in 30 companies. This is part of Bank Melli’s attempts to be less of a business-owner and more of a bank, by adhering to articles 16 and 17 of the law on “removal of obstacles to competitive production and boosting the country’s financial system”.
The law mandates all banks and financial institutions to privatize at least 33% of their excess assets every year, especially those engaged in “non-banking activities”.