On November 10, work began on the construction of a new steel mill in the city of Quchan in the northeastern Iranian province of Razavi Khorasan. In its first phase, the new plant is to have an annual capacity of 300,000 mt of debar, T-bar, angles and beams. This initial phase of the project will require a total investment of around Rials 500 billion ($54 million) and less than 30 months for implementation.
In its second phase, annual capacity will be increased to 500,000 mt. The new mill will be based on an area of 100 hectares, while its production facilities will be contained in an enclosed area of 15,000 square meters.
The peculiarity of this project lies in the mill's use of raw materials. While in its first phase, the new mill will use scrap for steel production, during the second phase a complete switch to use of iron ore will occur.
Commenting on the construction, project managing director Mr. Ahmad Reza Soleymani said that 30 percent of the machinery required would be supplied from domestic sources, with the remainder to come from foreign plantmakers.
According to market experts, the location of the new mill in the province of Razavi Khorasan is very advantageous, as the province holds large reserves of raw materials necessary for metallurgical production.
Currently, Iran consumes about 20 million metric tons of steel products, while domestic producers can only supply about 13 million metric tons.