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EghtesadOnline: Iran’s Department of Environment has issued a permit for Chadormalu Mining and Industrial Company to initiate exploration operations in the iron ore-rich D19 geological layer, the head of Iran Mine House, Mohammad Reza Bahraman, has announced.

CMIC’s current iron ore reserves are expected to run out in about six years and the anomaly located close to the company’s current mines is seen as its only salvation.

“Considering the huge investments undertaken [in CMIC] for completing the steel production chain, resurveying the iron ore reserves in mineral zones around Chadormalu was necessary. The new understanding between Chadormalu and DOE will make a precise assessment of D19’s reserves possible,” Bahraman was quoted as saying by Bourse24.

The exact date for starting exploration operations has yet to be announced, according to CMIC’s public relations, according to Financial Tribune.

The importance of the new agreement lies in the fact that a dispute between CMIC and DOE over the D19 anomaly had been going on for well over a decade. Located in Yazd Province, the zone holding new potential reserves is part of a protected area that is home to the Asiatic cheetah and the Persian leopard. Protected areas in Iran are managed by DOE and its consent is mandatory to allow any activity in the zone.

Chadormalu has made “pledges” to DOE for safeguarding the zone’s environment, an official at CMIC told Financial Tribune via telephone.

“Our other mine is already operational in close proximity to the anomaly and we have taken measures to protect the environment there,” he said.

CMIC has reportedly created 80 hectares of green space around its main mine that is located 180 kilometers from Yazd city.

The company has the capacity to produce 10.5 million tons of iron ore concentrate, 3.4 million tons of pellets and 2 million tons of steel per year. It is one of the Middle East’s largest iron ore concentrate producers, which reached an output of 9.05 million tons of the material in the last fiscal year (March 2016-17), according to statistics released by Iranian Mines and Mining Industries Development and Renovation Organization.

Chadormalu’s main stakeholders include Omid Investment Management Group with a 39.17% stake, Mines and Metals Development Investment Company with 16.6% and Mobarakeh Steel Company with 8.23%.

The company’s continued production is also essential for Iran’s steel expansion program. The government aims to turn the country’s steel industry into the world’s sixth largest manufacturer as per the goals set in the 20-Year Vision Plan (2005-25), which stipulates the production of 55 million tons of crude steel. In order to realize this figure, over 150 million tons of iron ore are required.

The new mineral zone holds an estimated reserve of 100 million tons of iron ore, according to CMIC’s Managing Director Mahmoud Nourian.

Chadormalu’s investors reacted favorably to the news, propping up the company’s stocks after weeks of stagnant trading.

More than 45.1 million of CMIC’s shares valued at $1.84 million were traded on Tuesday. Listed on Tehran Stock Exchange under the ticker “CHML” with a $1.36 billion market cap, the company’s shares grew 4.99% on Tuesday to 1,556 rials per share.

Chadormalu’s earnings per share and price to earnings ratio at TSE stand at 224 rials and 7.08. This is while the company had recorded only seven days of gaining in trade in the month ending August 22. Tuesday saw the month’s highest trade volume and value.

Interestingly, the company issued a statement to its investors on Wednesday via that despite “Mr. Bahraman’s comments . . . any news regarding a written and finalized agreement will be announced promptly.”  It seems the company has simply tried to be on the safe side of its oral agreement with DOE. Investors, however, always pick at any possible rumor in the market and CMIC has successfully exploited this.


Iran iron ore Chadormalu mining Iran Iron Ore Mining