Iran’s KSC Buys 67% Stake of Iranian Pellet Compay NIMIDCO

Khouzestan Steel Company, the largest steel Iran has recently bought 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 MnT per year pellet and concentrate plants, and cooperate in the construction of a second 2.5 MnT per year pellet plant, which is slated to come on stream in the next fiscal year (March 21, 2018-19).

“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 in an interview earlier this month.

Khouzestan Steel Company was the largest exporter during the 11 month of current Persian year (21 Mar’17-19 Feb’18), the company exported around 2.51 MnT steel during the period. The company witnessed a growth of around 49% Y-o-Y against 1.68 MnT steel exported last year same period.

Bloom has the major share in KSC’s export, the company exported 1,052,183 MT in current Persian year, registered a growth of 153% Y-o-Y. Another major product exported by KSC during the period were billet and slab. The company exported 725,901 MT and 727,839 MT respectively

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”.

Inputs taken from Financial Tribune