MME Enjoys Special Status in Europe
Morteza Aghajani, MME CEO and Hassan Karbaschi, Director of Iran branch of
MME participated in a joint interview with Iran International and elaborated
on the activities of the company in recent years as well as the performance
of IMIDRO under the government of President Hassan Rouhani. They also talked
about the role the Joint Comprehensive Plan of Action (JCPOA) could play in
facilitating foreign investment.
Introducing MME Company
The MME Company is the only engineering company in the field of mine and
mining industries which was registered in Europe (Germany) some 20 years ago.
Considering the contacts established with different manufacturers and
specialists since the founding of the company, it now enjoys a special
status in Europe. Also with regard to the implemented and ongoing projects
in Iran and operating under the Iranian Mines and Mining Industries
Development and Renovation Organization (IMIDRO), it has acquired an
excellent status in the mining and steel industry. These are available
facilities and privileges that if used properly, this company can act as a
bridge and transfer technical knowhow and attract foreign investors and
partners, especially from Europe, towards Iran’s infrastructures.
Ongoing Projects: Progress Status and Time of Launching
MME Company is present in five provincial steel projects as the contractor
in the engineering and supply section. Current projects of the company in
the field of direct reduction include Shadegan Steel, Miyaneh Steel, Baft
Steel, and Neyriz Steel all of which are implemented under the exclusive
innovative method of the company known as PERED (Persian Direct Reduction).
In the Shadegan Steel project, installation has been completed and parts of
the equipment have become operational and we hope that launching of the
remaining equipment will be accomplished by the year-end. From the beginning
of the next year; we will be witness to the production of Shadegan Steel.
Meanwhile, Miyaneh Steel project is at the stage of completion of the
installation and with the deployment of the MME supervision team, operation
of the equipment has started recently and is at the stage of cold testing.
This project too will become operational in the early months of the next
calendar year (starting March 21, 2017). In addition, it is predicted that
the Neyriz project which has had satisfactory progress from the beginning of
the year will become operational in the spring next year shortly after
With regard to the uniformity of the technology for the MME reduction
projects in provincial projects, after operation of Shadegan Steel project
and the experience gained, cold and warm testing will certainly be done in
other projects more easily and more speedily. Furthermore, with the
operation of provincial direct reduction units in PERED method, a good
reference will be set for this technology as a result of which new markets
will be developed for the MME Company both inside and outside the country.
Our other project is Sefid Dasht Steel the reduction part of which has been
opened and in its steel manufacturing part, the MME Company is present as
the designer and financier of the equipment. At present and with the
financing of Mubarakeh Steel Complex part of the equipment has been shipped
to Bandar Abbas.
Meanwhile, ordering and completion of the remaining equipment of the project
has been activated and we hope that with the support of Mubarakeh Steel
Complex supply, installation and operation of the project will be completed
within 18 months.
Measures Taken in Recent Years & Priorities of MME
Our first priority is accomplishment of the obligations related to the
current and ongoing projects such as provincial plans and given that for the
first time the PERED technology will be applied in these projects sound
planning for the realization of such an important task enjoys special
Parallel to the implementation of the current projects, paying attention to
the market development with the priority of presence in all stages of steel
production chain ranging from the concentrated lines and pellet to casting
and production of specific steel products are on the agenda.
In the next step, entrance into other mineral industries such as aluminum,
copper, lead, zinc, etc. is considered for which measures have been taken
and we are decisive to play a role as an engineering company in these
industries through consultations and use of the potential of other partners
and qualified companies in the form of joint venture.
Also with regard to the needs of the steel companies of the country to
optimization of production lines and reduction of especially water,
electricity and gas consumption, the MME Company has compiled a corrective
proposal in the above-mentioned fields and signed memorandums of
understanding with eligible companies for the implementation of the related
projects, including Foolade Paya, Tadbir Sanaat, Absan Palayesh, Irisa, etc.
in order to take measures for the related marketing within the framework of
Our other target is elucidation and presentation of capabilities and
potential of the MME Company to organizations and companies active in the
field of mining and mineral industries. As was previously mentioned, the
experiences gained in the past and present projects, presence in the heart
of Europe and recognition of the suppliers, access to the European
professionals in various fields and ... have provided unique conditions for
the company, which belongs to this country and should be put at the disposal
of companies and mineral and industrial complexes.
In this regard from many years ago agreements have been signed for offering
technical and engineering services with major steel companies such as
Mubarakeh Steel, Khuzestan Steel, Oxin Steel, etc. for the dispatch of
foreign specialists and implementation of executive and supervision
activities. At present too through consultations conducted we are signing
the same type of agreements with the provincial steel companies as well as
Iran National Steel Company and IMIDRO in proportion with the needs of each
In addition, reform of the manpower structure has been completed on the
basis of contractual obligations, including the use and stationing of
operational, educational, etc. teams in the sites of provincial projects,
strengthening of Iran engineering team for conducting technical and economic
studies in different fields of mining and mineral industries, completion of
engineering of Sepid Dasht project and new fields of activities
of MME Company.
In your opinion, what role the Joint Comprehensive Plan of Action (JCPOA)
has played and will play in attraction of foreign investment and in
realizing the targets of steel Vision Plan?
With regard to the openings made in the aftermath of JCPOA (Iran nuclear
deal) and the new atmosphere governing over Iran’s economic relations with
the world community, conditions will be different from the past for the
attraction of foreign investment. Therefore, through proper mainstreaming,
creating political and economic stability and eliminating the existing
barriers, we can act effectively in the area of steel. Consequently, it can
be hoped that we will get closer to the targets of the steel Vision Plan. Of
course, we should also pay attention that even in case of attracting the
required capital for producing 55 million tons, planning for the supply of
the raw materials required for the production of this amount of steel and
the relevant infrastructures, including railroad transportation, water
resources, gas and electricity, etc. should be made so that the balance of
steel production and supply, in an integrated form, would be accurately and
seriously considered in the development of the forthcoming years.
In the aftermath of the JCPOA relations have become easier to some extent
but the obstacles for attracting foreign investment, despite the efforts
made were not completely eliminated which, of course, is natural and
requires passage of time. The main obstacle is in the field of finance which
if removed many of the problems would be solved.
Of course, after the new administration came to power in the United States
and the new positions taken about JCPOA, new developments have taken place
and the prospect for resolution of the problems through full implementation
of the JCPOA has been slowed down a little. But, we are totally optimistic
because in Europe, due to different reasons, there is a positive outlook
towards Iran. At the same time, in the field of marketing we have widespread
activities both inside and outside Iran. Studies of the bauxite project in
Guinea, steel project in Pakistan and PERED project in China are near
How would you assess IMIDRO performance in the field of steel under the 11th
Being aware of the financial problems caused by the drop in the 11th
government’s revenues, IMIDRO decided to delegate the projects which had
been almost halted or had very slow progress to the private sector.
Fortunately this decision was welcomed by domestic investors which caused
the projects come out of the recession. Of course, the experience of calling
on the private sector showed that participation of steel companies in
provincial steel projects would be warmly welcomed. Because, large companies
such as Mubarakeh Steel Complex and Khuzestan Steel even under economic
recession and lowering of the price of basic metals, still have the
potential to finance such projects. On the other hand, given that these
companies are sponge iron consumers, they were interested in supplying their
sponge iron requirements from the provincial sponge iron production capacity
instead of purchasing the product from other suppliers thus reducing parts
of their costs.
Karbaschi said: Experience of calling on the private sector
showed that participation of steel companies in provincial steel
projects would be warmly welcomed.
In addition, given the experience and full dominance that major steel
producers have in the operation and management of these types of units,
definitely operation of these projects will be faced with less obstacles and
problems and will be implemented under better conditions. At present,
Mubarakeh Steel Complex holds over 65% of the shares of Sepid Dasht Steel
project which is the first provincial project to become operational. Also,
65% of the shares of Shadegan project have been purchased by Khuzestan Steel
Complex and we hope this project will soon become operational with PERED
technology as the first provincial project. The decision taken for financing
through participation of the private sector in completion of the projects by
the senior management of IMIDRO broke the lock of the provincial projects.
Generally speaking what problems the contracting companies are faced with?
The extended period of the projects is one of the problems that have caused
different elements such as the major and minor contractors to sustain fixed
costs, the costs of engineering services and other current costs for a
longer period of time. On the other hand, the prices that have been
specified at the time of concluding the contract are widely different from
the real costs of supply and implementation and due to the inflation created
in that period of time the prices of most equipment and raw materials have
Although the employers consider coefficients and adjustments to compensate
for this situation, in many cases, these coefficients are not commensurate
with the inflation and rising prices that have emerged in this long period.
In addition, in some cases lack of operation of the initial LC has caused
that a major amount of the money which was expected to be paid in foreign
currency to the contractors for the implementation of different projects,
has been paid in local currency.
In addition, given that due to some governmental limitations such demands
have not been paid to the companies on the basis of free market rates
(payments have been made on the basis of subsidized exchange rates lower
than the open market rates), the financial potential of the contractor
companies has been weakened. The contractors, for the supply of foreign
equipment, would sign contracts with foreign manufacturers and contract
obligations should be precisely implemented.
Naturally what has occurred within our country regarding the demands and
agreements reached between domestic contractor companies and the employers
will cause no change in contract obligations and payments of the contractors
with foreign partners. Furthermore, some of the equipment prepared for these
projects will gradually become worn out or sometimes their guarantees are
expired. For example parts of the rotating equipment such as compressors
demand review and possibly repair. Presence of representatives of foreign
manufacturers for the inspection of equipment and if needed for changing the
relevant parts, as well as the guarantees that need to be issued for these
parts will impose costs on the employers and contractors. Collection of
these costs will severely affect the financial potential and the margin of
profit of the contractors.
What are the problems facing implementation of the projects in EPCF?
Problems related to this filed
are almost the same as those in all contracting companies. Due to the
existence of such problems in the past years we have witnessed fewer EPCF
projects. Due to the same reason the companies have made efforts to
implement smaller-scale projects with their limited financial resources. But
for the large projects or continuation of the projects under implementation,
such problems still exist. Among the problems that exist on the way of using
foreign finance is that generally supply of foreign finance is in need of
some pre-conditions. One of these pre-conditions is supply of 40 to 50
percent of the factory equipment through foreign investor countries. Now
that realization of this effort is subject to the existence of the required
technology in that field, another obstacle is the required guarantee
expected by the investor for providing the financing.
MINES & METALS ENGINEERING GmbH
+49 (0) 211 6999051-0
+49 (0) 211 6999051-99
Branch Office Iran
Fourth Alley, South Pirouzan St,
Hormozan St, Shahrak Gharb, Tehran.
+98 (0) 21 88577870
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