Greenfield Gohar Zamin project goes to bid

03 March 2006

The local Gohar Zamin Iron Ore Company has invited international contractors to bid for the contract to build an iron ore concentrate production plant and a direct reduction iron (DRI) ore pelletising plant at the Gol-e Gohar mining complex in Kerman province. The project is part of plans to rapidly increase local iron and steel production. However, it is unclear how much appetite there is among foreign investors for a new finance-heavy industrial project in Iran.

Engineering, procurement and construction (EPC) bids for both tenders are due to be submitted by 12 March. Gohar Zamin plans to build five iron ore concentrate production units with capacity of 2 million tonnes a year (t/y) each and two 5 million-t/y high-grade DRI ore pelletising units. The plants will be supplied with feedstock from the Gohar Zamin mine, part of the Gol-e Gohar mining complex, which is expected to come into operation by early 2008 with production of 20 million t/y of iron ore. The EPC work will take 36 months, with contract awards scheduled for 2006 and commissioning set for 2009. The successful bidder will also have to arrange project financing. According to project sources, contractors must submit proposals to bring 100 per cent of the finance for the plants. So far, no state funds have been made available for the project either directly or through the oil stabilisation fund. The final product is to be marketed both in Iran and abroad.

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