Development of Iron and Steel Industry of

Pakistan
United Kingdom in their colonial rule in India developed a strong base
of steel industry in the subcontinent. The main purpose was to develop
a large network of railways so that Britain can easily transport trade
goods within India and bring those goods to sea ports from where they
would be taken to Europe.

Early Years of Pakistan

After the partition of Subcontinent in 1947, India had 3 steel
producing plants whereas Pakistans share of Iron and steel industry
was 2 producing units.
i.
North-Western Railway (Mughalpura, Lahore)
It was operated by government and it contained
3 ton Arc Furnace
18th century Bridge Crain to move ladles
ii.
Mukand Iron and Steel Works (Badami Bagh, Lahore)
It was a private enterprise and was equipped with
5 ton Arc Furnace
6-inch Rolling Machine
Machine Shop
The total production of these two units was about 12,000-13,000
ton/year. This production capacity was insignificant to Indias total
production which was 1.25 million ton/year in 1947.
Other than these two plants there were some small steel industries in
the following cities of West Pakistan :
- Sialkot
- Gujranwala
- Duska
- Wazirabad
Whereas there was no significant steel industry in East Pakistan, worth
mentioning. The steel industries at that time were majorly catering
needs of agricultural sector. A large portion of iron and steel was
consumed in making knives and cutting tools for farmers.

Determining the Iron and Steel Policy

The importance of iron industry in a countrys economic

development and growth is unique and unavoidable. Pakistan
government introducing its first industrial policy reserved 27 industries
including Iron and Steel industry for control by the centre.
Development of Industries (Federal Control) act was enacted in 1949
and Steel Industry came under official control of center.
1

Initial Surveys
In 1949 Malik Ghulam Muhammad, the then minister of Pakistan for
Finance and Economics Affairs invited United State Steel Export
Company to recommend the government of Pakistan to the most
effective method of obtaining the kind and quality steels for Pakistans
economy. The U.S. mission consisted of 17 experts. In 1950 the mission
submitted a detailed recommendation of plants to be installed.
By the end of 1951 Pakistan Industrial Development Commission
(PIDC) contracted Demag of Duisberg, Germany, to undertake the
investigation of iron ore in Chitral and other parts of Pakistan. The
result were encouraging, as they proved that setting an integrated iron
and steel plant in Pakistan was feasible. Another area of high
concentration ore was discovered, Kalabagh and its surrounding area
had good reserves of 18,000,000 tons of iron ores.
Government of Pakistan began construction of Foundry in Wah at 1954
and around the same time Karachi Shipyard Foundry was finalized and
execution began in 1956.

Iron ores reservoirs in Chicali

In 1955, Messrs. Krupp and PIDC submitted a proposal involving
installation of a plant at Piran Ghaib near Multan. The plant was
supposed to produce 50,000 to 70,000 tons of billets using Chicali Iron
Ore by employing Krupp-Renn process and electric arc furnaces. The
proposal was rejected on the grounds that Krupp-Renn process was not
industrially sound and feasible and also that the scheme was not
economically viable.

World Bank Report

In early 1959, services of Mr. C. L. Austin of the World Bank were
acquired by the government of Pakistan to advice on the future course
of action for the establishment of the iron and steel industry of
Pakistan. Based on Mr. Austins recommendation the Central Cabinet
decided that:
i.
further exploratory work should be carried out to prove
feasibility of Chicali ore by in depth analysis of as many
samples possible
ii.
the project should be handled by Bureau of Mineral
Resources on a priority basis.
2

iii.

PIDC should continue its prospecting operations for iron

ores in the Chicali area.
In compliance of Central Cabinet decision, Bureau of Mineral Resource
in 1959 assigned investigation to Messrs. Kellog of USA who in turn
proved that Chicali iron ore is not suitable for Direct Reduction process
of Iron extraction. It was also later on proved that Chicali ore was not
suitable for Krupp-Renn process.
However, wheels of industries turned on with positive result. The Sheer
will of the people through Arc Furnaces built up steel production
capacities to 63,600 tons per year till 1960.
Table 1 - Steel consumption in 1960
Public Sector
Consumption(tons/year)
I
Pakistan Western Railway, Lahore
Ii Pakistan Ordinance Factory, Wah
Cantt
iii Karachi Shipyard & Engineering Works
Private Sector
Consumption(tons/year)
I
BECO Industries, Lahore
Ii Karimi Industries, Nowshera
iii Sartaj Industries Ltd. , Lahore
Iv Steel Casting, Gujranwala

15,000
10,500
5,400
15,000
4,500
3,600
3,000

Steel Mill in East Pakistan

In 1962 PIDC was bifurcated and East Pakistan Industrial Development
Commission (EPDIC) planned a steel mill based on imported pig iron
and scarp. It went into production in 1969 with a moderate target of
75,000 tons/year which was doubled to 150,000 tons/year in 1970 and
ultimately by expansion to a production capacity of 250,000 tons/year.
Unfortunately due to disturbance of 1971, which resulted in separation
of East Pakistan as a separate country Bangladesh, the plant was
brought to a stand still.
War with India in 1965 resulted with raw material shortage for rolling
mills.
A scheme prepared by WPIDC in 1966, on alloy steel production passed
on to the private sector.

Kalabagh Steel Mill Project

As a result of Russian Premier Kosygins visit to Pakistan in April 1968,
the government decided to offer Kalabagh Steel Mill Project to the
Russians for consideration. An agreement was signed between the
WPIDC and Messrs.
Tiajpromexport of Moscow in May 1968 for the preparation and
submission of an economic and technical report on the Kalabagh steel
mill project.
The Russian experts submitted their feasibility report on the Kalabagh
Project on 17th May, 1969. Whilst disagreeing with the technical and
economic aspects as presented by the Slazgitter group earlier, the
Russians considered that Kalabagh project based on the use 100%
Chicali ore would suffer from extremely high capital costs and
unfavorable operating economics.

Planning for Pakistan Steel Mills

In 1960 a contract was signed between by the government of Pakistan
and U.N. Pak Mineral Survey Committee for mineral investigation in
Pakistan and it was proved by Geological Surveys that reserves of iron
ore and other raw materials required for iron making existed amply and
the following deposits were confirmed later in 1961-63 by the United
Nation Special Aid Fund:
i.
Iron Ore
250 million ton in Chucali pass
150 million in Kutch, Ghulgan and Makerwal mines
ii.
200 million tons of high grade limestone
iii.
900 million tons of dolomite
iv.
Ample reserves of High-Quality fireclay
v.
Molding sand
Abundant supplies of water for cooling and industrial use were
available from Indus River and Arabian Sea.
In view of the above United Nation Special Aid Fund arranged a pilot
plant trial on 1,500 tons of Chicali iron ore at Ougree near Liege in
Belgium in November 1964 and found that iron could be successfully
extracted by employing acid blast furnace process. This was further
confirmed by a full-scale industrial test on 15,000 tons Chicali Iron ore
at Salzgitter, West Germany in 1966, which according to the
international experts was a complete success.

Building of Blast Furnace

In July, 1968 Pakistan Steel Mills Corporation
was setup as a private limited company in
the public sector in accordance to the
Companies Act of 1913, with the objective
to establish and run steel mills at Karachi
and other places in Pakistan.
The foundation stone for this gigantic
project was laid on the 30th of December,
1973 by the then Prime Minister Mr. Zulfiqar
Ali Bhutto. The mammoth construction and
erection work of the integrated steel mill,
never experienced before in the country,
was carried out by a consortium of Pakistani
construction companies under the
supervision of Soviet experts.
Pakistan Steel did not only have to construct the main production units
but a host of infrastructure facilities involving unprecedented volumes
of work and expertise. Component units of the steel mill numbering
over twenty and each a big enough factory in its own right were
5

commissioned as they were completed between April, 1981 to August,

1985 with the Coke Ovens and By Products Plant coming online first
and the Galvanizing Unit last. Commissioning of Blast Furnace Number
1 on the 14th of August, 1981 marked Pakistan's entry into the elite
club of iron and steel producing nations. The project was completed at
a capital cost of Rs. 24,700 million. The completion of the steel mill
was formally launched by General Zia-Ul-Haq the then President of
Pakistan on the 15th of January 1985.

The Infamous Scandal of Pakistan Steel Mills

Privatization
In May 2006[2], the government of General Musharraf privatized
Pakistan Steel Mills. Ict process. The verdict was delivered on 8 August
2006.[2]
The Supreme Court on 8 August 2006 held that the entire
disinvestment process of the Pakistan Steel Mills reflected a haste,
ignoring profitability aspect and assets of the mills by the financial
adviser before its evaluation. The transaction was the outcome of a
process reflecting procedural irregularities, said the 80-page judgment
in the PSM case.
On 23 June, a nine-member bench of the Supreme Court had annulled
the sale of the countrys largest industrial unit to a three-party
consortium and had directed the government to refer the matter to the
Council of Common Interests within six weeks. It had declared the
$362 million transaction with the Russian-Saudi-Pakistan investors as
null and void.

Verdict of Supreme Court

Authored by Chief Justice of Pakistan Justice Iftikhar Mohammad
Chaudhry, the judgement said the entire exercise reflected a haste by
the Privatisation Commission (PC) and the Cabinet Committee on
Privatisation (CCOP). The PC had processed the 30 March final report of
the financial adviser the same day and a meeting of the PC board and
a summary had also been prepared the same day when a six week
time was mandatory to examine and fix a fair reference price for
approval by the CCOP.
This unexplained haste casts reasonable doubt on the transparency of
the whole exercise and reflects CCOPs disregard towards mandatory
rules and materials, essential for arriving at a fair reference price, it
maintained.
The board had proposed to value the share of the mill at Rs17.43 but it
was reduced to Rs16.18 without assigning any reason, the verdict said.
The verdict said that keeping in view the annual net profit of the mill,
6

its shares value should have been ascertained by offering 10 per cent
equity of the mills on the stock exchange.
A constitutional court would be failing in its duty if it does not
interfere to rectify the wrong, more so when valuable assets of the
nation are at stake, the judgment said.

Present condition of Pakistan Steel Industry

Today Pakistan Steel mills is producing about 1 million ton per year
steel where private sector is producing 30 million (including billet, bars,
channel and angle etc.) Pakistan Steel Mills are, however, meeting only
25% of the country's demands. The rest is being met through imports
and ship breaking. The production is seriously hindered by ill planning,
corruption and mismanagement. The mill has two blast furnaces that
are not working at their optimum capacity. BF I is reportedly
deteriorating as its outer lining has been burnt and BF II, which was
recently repaired at a cost of Rs.700 million, cannot be run at its full
capacity because fine quality pig iron is not available.

History of Iron and Steel Industry of

Iran
Initializing Ironmaking in Iran

n 1927, plans were drawn up to establish smelting works in the north

of the country to produce rail tracks domestically. This action was in
connection with the go-ahead given by the parliament to start the
construction of a railway between Koor Musa and Mohammara. Out of
the railway budget, 4.5 million tomans were earmarked for this
purpose, and a German expert was engaged to make a feasibility
study. Suitable iron had been found near Semnan, but no coal. The
works would be dependent on the emak coalmine, which was about
100 miles away, so a special railway would have to be built between
the mine and the works; moreover, it was feared that the ore deposits
at Semnan would be exhausted in fifteen years if the works were to
operate at full capacity. As a result, the project fell through at the end
of 1928. In early 1928 bids had actually been invited, despite the fact
that the feasibility study had estimated the costs to be twice the
amount which the Majles had allotted, while the German Krupp
Corporation, one of the worlds principal steelmakers and arms
manufacturers until the end of World War II, even estimated the costs
to be much higher.

Agreement with Germany for Blast Furnaces

Although the government shelved the project for the moment, it did
not forget about it. In 1938, an agreement was reached, after much
study and preparation, between Iran and a German consortium
(Demag-Krupp) for the construction of two blast furnaces with a daily
production of 150 tons, a steel factory, a rolling mill, a wire-drawing
mill, a foundry, a wrought ironworks, a coke crusher, a power plant,
9

and some ancillary industries such as a lime plant, an ammonia and

benzol plant, and a tar distillation plant. The works were to be
completed in three and a half years time and would employ 1,200
workers when working at full capacity. The original site was planned to
be south of Tehran near the cement works, but Karaj was chosen
instead, because of its more suitable water supply. A disadvantage,
however, was that coal supplies for the power plant and the blast
furnaces had to be transported from emak and Zirab at about 35
miles distance. In 1939, Reza Shah laid the first foundation stone, and,
although work proceeded as planned, the works were still unfinished in
1941 when the Allies invaded Iran. This event meant, of course, that
the whole project was jeopardized, for all relations with Germany (q.v.)
were cut, which led to the demise of the project. Part of the machinery
was still at sea when World War II broke out and was seized by the
Allies, and the rest remained in Germany and rusted away. The partly
completed buildings at Karaj became dilapidated (Floor, 1984;
Koellner). There were also a small number of traditional iron foundries
and blast furnaces in Mazandaran, and the erection of a new plant in
that area to smelt 300 tons of iron per day was being considered
(Gupta, p. 75; Elwell-Sutton, p. 104).

Collaboration with Sweden

After World War II, the government wanted to complete the Karaj
factory (subject to availability of coal) to manufacture rails, sleepers,
iron beams and sheets. However, the Overseas Consultants report
advised against it . Since then, more has been said and less done
about a steel industry than any other industry in Iran . For the
government persisted in its desire to have a steel mill and hired a
continuous flow of 25 different groups of consultants, who all came to
the same conclusion that the steel mill was not viable. Although the
Krupp Corporation agreed in 1952 to renew its contract to build the
mill, the World Bank (International Bank for Reconstruction and
Development, IBRD) refused to finance the project in 1959. In 1961, a
proposal prepared by the London-based Kaiser Engineers Corporation
for a rolling mill at Karaj, as the first phase of an integrated steel mill,
also was unable to obtain IBRD financing. The project then was
shelved, although funds had been allocated in the Third Development
Plan. A project for a private foundry in Khuzestan to process imported
scrap (35,000 tons per year) was approved. The project was only
realized in 1963, when an agreement was reached between a private
Iranian and a Swedish company to build the scrap metal steel mill.
Meanwhile, the armys munitions factories acquired a five-ton foundry
and the Iranian State Railways a 10-ton per day electric arc foundry.
Mainsazi-ye Iran, a private company, built a cast-iron foundry in 1960
10

at Ahvaz (q.v.) with an annual capacity of 6,000 tons. It produced

mainly cast-iron pipes (Echo of Iran, 1963, pp. 277, 297; 1965, p. 239).

Contract with Russia

The basis for future steel production in Iran was laid by the signing of a
contract with the USSR in 1965 to finance and erect a steel plant in
Isfahan (National Iranian Steel Company, NISC). Repayment of the loan
was done through deliveries of natural gas from Iran to the USSR. The
state-owned plant consisted of four production units using blast
furnace processing technology with a production capacity of 550,000
tons per year. The Isfahan steel plant (Aryamehr Steel Mill, later called
Doawb-ahan-e Esafahan) was commissioned, and its cast iron
department came into operation in 1971. At that time, a contract for
the expansion of the Isfahan steel plant to a capacity of 1.9 million
tons per year of structural steel was signed with the USSR. Work
started in 1973, but due to political and economic upheaval the plant
was not completed until 1983. The private-sector Iran National Steel
Industries Group (INSIG, Goruh-e Melli-ye Sanati-ye Fulad-e Iran)
erected a second 85,000 tons per year rolling mill (Sahin), also at
Ahvaz, in 1969, and ordered a third one (Sahyar, 120,000 tons per
year) to produce structural steel by rolling imported, semi-finished
steel products. Later the two plants were referred to as Navard Iran.
INSIG also constructed a steelmaking shop (using an electric arc
furnace [EAF] and continuous casting [CC] technology) to produce
semis by melting steel scrap. Two other bloom plants for processing
sponge iron (400,000 tons capacity) were erected in 1972 by the
Sahriyar Industrial Group; they were nationalized after the Islamic
revolution and are now managed by the National Iranian Steel
Industries Company (NISCO). The Ahvaz complex supplies these two
plants. Also built were the Ahvaz Rolling and Pipe Mills Company to
produce 140,000 tons of skelp (steel shaped for pipe-making) per year
and the Sahriyar Pipe Manufacturing Company to produce 80,000 tons
per year of seamless and galvanized pipes (0.5-5 inches diameter),
both in 1973.

Switching to DRI Technology

The problems encountered at the Isfahan steel plant and the private
sector furnaces (shortage of scrap and quality coking coal) constrained
the governments policy to expand the countrys iron and steel
industry to respond to growing domestic demand. The development of
new methods of direct reduction processing technology provided a
viable alternative for the government, given the fact that Iran had rich
resources of natural gas and various required raw materials, in
particular, iron ore. The resulted in the establishment of another stateowned company under the name of NISCO in the mid-1970s to produce
11

iron and steel products by utilizing the direct reduction process, as well
as to mobilize the relevant iron ore mines. To accomplish this, two
contracts were signed between NISCO and a European-American
consortium to construct two integrated steel mills in Bandar-e Abbas
(q.v.) and Ahvaz and a heavy rolling mill in Ahvaz.

Role of National Iranian Steel Company(NISCO)

After the Islamic Revolution in 1979, fundamental changes took place
in the Iranian Steel Industry Organization. The two state-owned
companies were merged, and NISCO was affiliated to the former
Ministry of Mines and Metals, and the Ministry of Industries and Mines
was established. NISCO now directs and supervises the Iranian steel
industry from the exploration stage of its relevant raw materials up to
the marketing of its products in domestic and international markets. As
the largest state-owned steel company in the Middle East, NISCO
ranked 26 in the table of the worlds major steel producing companies
in 1999 and 2000. NISCO is also a regular member of the International
Iron & Steel Institute.

Building of Ahvaz Steel Complex

During the Iran-Iraq war (1980-88) the steel industry development lost
its impetus to some extent. Construction of the Ahvaz Steel Complex
(Mojtame-e Fulad-e Ahvaz) had been started in 1974 with a planned
capacity of 2.35 million tons per year. Completion was scheduled for
1983, but was delayed by damage due to Iraqi air raids, and the plant
cost 40 percent more than originally estimated. However, immediately
after the cease-fire and implementation of the First and Second FiveYear Development Plans of the country, the steel industry achieved a
considerable growth. In 1988, the volume of steel production did not
exceed an annual one million tons. However, it reached 6.3 million tons
in 1999 and 6.6 million tons in 2000. This was due to the completion of
old projects and the implementation of new ones. Of the old projects
the most notable was the Ahvaz Steel Complex, which is built 12 km
from Ahvaz on a terrain of 300 ha. The first of the plants was ready for
operation in 1989 with a capacity of 55,000 tons per year. Its 150 x
150 mm steel ingots are supplied to NISC, which transforms them into
beams and round bars.

Improvement in Capacity of Ahvaz Steel Complex

The second and third phases (two furnaces and a casting unit) of the
Ahvaz Steel Complex were completed by 1989 and 1990, respectively,
with a production capacity of 1.6 million tons per year; this output is
converted into sheets by the Kavian heavy rolling project , which is
part of the Ahvaz steel complex. Work had started on the Kavian plant
in 1976, and it was completed (with delays) in 1989. Its output consists
12

of 400,000 8-40 mm sheets and 300,000 tons of slabs, while it also

converts slabs into billets and blooms using the hot rolling method. At
Ahvaz there is also the Nasr Steel Mill (Fulad-e Nasar), which produced
125,000 tons of steel billets in 1988. Its design capacity is 360,000
tons. The Khuzestan Steel Production Complex produced 1,698,000
tons of steel in 2002-03, hitting a record in its annual production. The
complex was to produce almost two million tons of steel in 2003-04.
Khuzestan Steel Co. (KSC) actually consists of three companies (Ahvaz
Steel Complex, INSIG, and Kavian), but in early 1994 NISCO, the
mother company, decided to integrate them into one company to
better compete in the world market. Further upgrades and expansion
also took place at the Isfahan Steel Mill in 1989 when the Italians
completed two continuous casting units.

Iran Alloy steel plant

One of the first new projects was the construction of the Iran Alloy
Steel Plant (Fuladha-ye Alyaji-ye Iran) at Yazd, which started in 1988
and became operational in 1998. It has a production capacity of
120,000 tons of alloy steel sections and 20,000 tons of alloy steel
ingots. The capacity may be raised to 200,000 tons later.

Mobarakeh Steel Complex

13

Another new project was the Mobarakeh Steel Complex (Mojtame-e

Fulad-e Mobaraka), which is the biggest industrial project in Iran. It has
been built by an Italian consortium and is located on 35 sq. km of land
and has 28 associated plants as well as a number of non-associated
ones. Originally it was planned to be built at Bandar-e Abbas, but it was
decided to build 75 km to the southwest of Isfahan to be closer to the
Uadormalu coal mines, which added much to the cost of its final
products. The Mobarakeh Steel Company is affiliated to NISCO and is
also the first integrated flat steel production plant in the Islamic
Republic of Iran based on DRI ["direct reduced iron" oxidation]-EAF-CC
technology. The plant became operational in late 1992 with a projected
production capacity of 2,935 million tons of liquid steel per year. The
current capacity is estimated at 2.8 million tons per year. Expansion of
the plant to an annual capacity of 4.1 million tons is under way. The
expansion contract was signed between Iran and three Italian
companies on a buy-back basis.

INSIG - Iran National Steel Industrial Group

INSIG (as noted above, part of KSC) also initiated the construction of
new capacity such as a bar rolling mill financed by the Italian steel
corporation Danieli with a capacity of 550,000 tons of bars on a yearly
basis. It also intends to reconstruct its casting and melting shops to
increase production to 470,000 tons of crude steel when financing has
been secured. INSIG is situated on the Ahvaz-Korramahr road and
was nationalized after the revolution. It has seven plants in five
sections, including three rolling mills, the first of which started
operating in 1967. The INSIG group produces knurled and plain bars,
drawn wires, iron beams, angle irons and belt in section 2. Steel and
steel girders are made in section 3, while section 4 has two galvanized
and non-galvanized pipe-making units (70,000 and 120,000 tons
capacity, respectively).

Capacity of Isfahan Steel plant

The Isfahan Steel plant will add new capacity to produce some 3.6
million tons of crude steel. The Saba Steel Complex, near Isfahan,
which has been designed and constructed by Isfahan Steel Mill, adds a
total of 700,000 tons of steel sheets to the countrys annual
production. The Khorasan Steel Complex in Nishapur (51 percent
privately owned, 49 percent Isfahan Steel) with an annual capacity is
550,000 tons became operational in 2002. Its capacity will be
increased with a sponge iron plant and capacity will be increased to 1.3
million tons. The Meybod Steel Project has a capacity of 300,000 of
cast iron per year. The Zagros Steel Project in Kurdistan province has a
14

capacity of 70,000 tons of cast iron per year. It is planned to add an

agglomeration plant later. The Hormozegan Steel Project has a planned
capacity of 1.5 million tons of crude steel. Hormozgan Steel Complex
signed two contracts in January 2003. A contract worth USD 300-400
million, for the construction of a 1.5 million-tons-per-year slab and lime
calcining plant, was signed with a consortium of Germanys SMS
Demag AG, Iran International Engineering Company (IRITEC) and its
subsidiary registered in Italy, Irasco. The estimated USD 140 million
contract for the setting up of a 1.65-million-tons-per-year direct
reduction iron facility was signed by Germany-registered Mines &
Metals Engineering GmbH (MME). NISCO will be the operator of the
plant. Financing will be arranged on a buy-back basis, with a structure
similar to the one used for the expansion of the Mobarakeh Steel
Complex. The buy-back agreement will cover both the projects
international and local content.

Bandar-e Abbas Jetty project

To sustain the expansion plans of the steel industry (in particular at
Isfahan Steel and Mobarakeh Steel), the ongoing Bandar-e Abbas Jetty
project will enable the handling of 5 million tons per year of minerals at
the port, allowing the docking of ships with a capacity up to 150,000
tons. Likewise the Bandar Imam Jetty project enables the handling of 5
million tons per year of iron ore at the Khuzestan Steel Complex. Ships
with a capacity of 60,000 tons can dock of the jetty, while further
dredging will allow docking of ships of 100,000 tons. Not only port
access and capacity are important for Irans steel industry, but also the
railway system. According to the Ministry of Industries and Mines, 50
per cent of total railway capacity was allocated to transporting the
output of the National Steel Company in 2000, and with planned
increase of steel production capacity more demand will be made on rail
capacity.

Present Condition of Iran Steel Industry

World steel production in 2000
World steel production in 2000 reached 850 million tons, of which
Irans share was 6.7 million tons; Iran then ranked twenty-third among
steel-producing countries, and twenty-first in 2004. NISCO reported
that the annual production of steel in Iran for 1382 (2003/04) was
estimated at 8.13 million tonsthe first time that Irans steel
production would surpass eight million tons. This meant that Iran was
able to satisfy 70 percent of domestic demand, while at the same time
exporting some 1.5 million tons of steel. Exports constitute a small part
of the output of the steel and other metal industries. Only ingots and
some aluminum was exported and amounted to less than 1 percent of
total exports in 1999. As to imports, except for universals, plates, and
15

sheets (UN International Trade Centre, no. 674), tubes, pipes and
fittings (678), and bars, rods, shapes, sections (673) all imports were
less than 1 percent of total imports. The location of the Mobarakeh
plant at Isfahan rather than near Bandar-e Abbas constrains its export
capacity due to high transportation cost. Investments are ongoing to
expand the capacity up to 14.7 and later to 18.4 million tons per year.
NISCO has also taken steps toward upgrading the quality of its
products and improving the management system with due
consideration to environmental protection and better working
conditions.

Production in 2002-2003
Iran was scheduled to produce some 8.1 million tons of steel and 7.6
million tons of steel slabs in 2003. In 2002, about 7.5 million tons of
steel, as well as 7.5 tons of steel slabs were produced in the country,
so the country is capable of producing steel and steel slabs in equal
amounts. However, the domestic consumption of steel was as high as
11 million tons in 2002, which meant that more than 3.5 million tons of
steel were imported. The domestic consumption of steel for 2003 was
predicted to be some 12 million tons, which is likely to increase with a
boom in the construction sector. This is because, unlike many countries
in the world which use concrete and bars, Iran uses iron slates in
construction, which also adds to the instability of its buildings. Despite
all, Iran managed to export 1.5 million tons of steel products in 2002.
Irans steel is capable of competing with European products due to its
quality and price. The only issue obstructing its path to more exports is
domestic demand that outweighs production.

Future of Iranian Iron and Steel Industry

The prospects of Irans steel industry seem favorable due to its large
and rich raw material resource base, its rich and cheap energy
resources, human capital and technical know-how. Iran not only added
new capacity during the last 20 years that significantly reduced the
countrys import bill and even made export of steel products possible,
but it also developed its own technological capacity. Iran, for example,
developed
its own
direct

16

reactivation method of producing iron with 96 percent metallization,

which works more effectively than the three other conventional
methods. The method has been patented and licensed to an Italian
company. The Isfahan Steel complex also has been developing
innovative techniques of producing spongy iron, manufacturing macroweighty crafts, etc. Takado Company was established as an investment
company and was an affiliate of Isfahan Steel. It started operating with
personnel from Isfahan Steel, and after a decade it became one of the
largest investment companies in the steel industry. It consists now of
13 companies and has 25 affiliated companies, and it is involved in
most aspect of the steel industry

Conclusion
Pakistan entered worlds steel making arena with a humble
beginning. There was gradual development in steel industry till
1970s. Pakistan Steel Mill can safely be called a milestone in
Pakistans history. However, the present production of
Pakistan Steel and its infamous privatization scandal indicate
the weak operation of Pakistans biggest industrial complex.
This is because Pakistans steel non-professional
administration which came to power due to curse of nepotism
and corruption.
To improve the condition of Pakistan Steel
Research and Development department should be made
strong
Expert technocrates should be brought to authority and
key positions
Eliminate nepotism and politics in administration

17

References
1. Development of Steel Industry in Pakistan by Fida
Rahim , Pakistan
Engineering Congress,
published in 1972
http://pecongress.org.pk/images/upload/books/P110.pdf
2. History of Pakistan Steel from the official Website,
http://www.paksteel.com.pk/organ_our_history.html
3. http://www.dawn.com/weekly/dmag/archive/060521/dm
ag1.htm
4. http://www.dawn.com/2006/08/09/top4.htm
5. .http://www.metalsnews.ir/en/index.php?
option=com_frontpage&Itemid=1
6. http://www.iranica.encyclopedia.com
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