Feasibility Study of Establishing a Direct-reduced Iron (Sponge Iron) Factory

Feasibility Study of Establishing a Direct-reduced Iron (Sponge Iron) Factory

Project Date : 2018
Employer : Government of the Islamic Republic of Iran The Supreme Council of Iran’s Free Trade, Industrial & Special Economic Zones


Sponge iron is one of the suitable raw materials in steel industry which has a great influence on
enhancing steel industry due to the high quality material. Sponge iron is produced from the direct
reduction of iron ore. The advantages of using Sponge Iron is more integrity in its combination,
less harmful elements due to its procerus nature, less pollution and easy transportation.

Production and utilization of steel products is one of the main development indexes of countries.
Iran was the 14th steel producer in the world with 18 million tons of steel production in 2017.
Although Iran ranks among the top 15 steel producers in the world, this country has no place
among the top steel production exporters. The main reason can be found in the governmental
prioritization policies in meeting domestic steel demands against exports.

Iron ore is notable as one of the most abundant elements on earth and 98 percent of the extracted
iron ore of the world is used to produce steel. Forasmuch as steel has wide usages, especially in
developing countries to ameliorate infrastructures, roads, transportation and automotive industry,
and etc. the demand for this product is very high and constantly increases, so improving this
industry can influence the market and the demand as a result.

Iran has one of the high alloy iron ores with 58 to 62 per cent of alloy.
According to 1404 Iran’s
Vision (development plan) production capacity of steel is considered to be 55 Million tons by 1404
(Year 2025). According to the reports, current production capacity of steel is 18 Million tons
(reported in 2017). As the steel production is prioritized in the strategic plan of the country,
investment opportunities in this field will increase. Steel industry is one of the main and biggest
industries around the world regarding lack of production plants. This industry is known as an
exclusive industry with only a few producers

The overall perspective of industry and mining sector in Iran’s 20-year outlook document
is to gain the first economic and industrial rank in the region with the following

  1. Developed on the basis of advanced and innovative technology, prospective and selfsufficient in supplying strategic goods
    2. Export-oriented and providing a significant part of the country's foreign exchange
    3. Balanced in different regions of the country based on regional capabilities and benefits
    4. Efficiency in the optimum level of materials
    5. synergic in the form of networks, clusters, and chains
    6. Complying with standards of regional and international market


 Direct-reduced Iron (Sponge Iron) Factory


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