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May 2017, No. 83


National Iranian Copper Industries Company
over the Past Four Years

Ahmad Morad Alizadeh, Chairman of NICICO

The National Iranian Copper Industries Company is the largest copper producing company in Iran. On July 3, 1972, Sarcheshmeh Copper Mines Company of Kerman was founded and four years later, in 1976, it changed its name to the National Iranian Copper Industries Company which embodies all the activities of copper mines in the country. Among duties of the company, extraction and exploitation of copper mines, production of high alloy copper ore and products such as cathode, slab, billet and 8mm wire could be cited. The Sarcheshmeh and Miduk copper mines in Kerman and Sungun Copper Mine in East Azerbayjan Province are among the most important copper mines in Iran. 

Production

Production of sulfur ore was about 38 million tons in 1392 (2013-2014) which increased to 45 million tons in 1395 (2016-2017) and is expected to reach 50 million tons in 1396 (2017-2018) with an increase of 31.5% over 1392. Copper concentrate will increase from 789 thousand tons in 1392 to 1100 thousand tons in 1396 which will experience a growth of 40%. Copper cathode was about 189 thousand tons in 1392 which will reach 214 thousand tons in 1396, showing an increase of 13%. The mineral content copper was 216 thousand tons in 1392 which increased to 243 thousand tons in 1395. It will reach 284 thousand tons in 1396 which will show an increase of 63%. Production of sulfuric acid will reach 120 thousand tons from 61 thousand tons, showing an increase of 97%.

Financial Boost

With the new approach of the state management and adoption of logical decisions by the new management team and through using capacities of the Joint Comprehensive Plan of Action (JCPOA) by mechanisms such as attracting liquidity, opening export market, reconstruction of the lines and increasing production, cost control, reducing the finished prices, concentration on prioritized projects and other managerial reform measures, the company enjoys an acceptable boom to the extent that despite the low price of copper in world markets in comparison to 1391 (2012-2013), up to the end of Bahman 1395 (January/February 2017), over 1990 billion tomans of loans received from the banking system have been repaid.

Sales from 1392 Up to Now: A Comparison

Based on the statistics and financial statements, sales of 1392 (2013-2014) were equivalent to 43330 billion rials which reached 64189 billion rials by the end of Bahman 1395 (Jan./Feb. 2017), and it is predicted that by the end of the year it will jump over 70,000 billion rials which would be indicative of a 62% growth. Keep in mind that the average price of copper based on LME (ton/dollar) in 1392 was about $7132 and this figure was about $5056 in 1395.

In 1392 copper exports amounted to $267 million and the figure will increase to about $1200 million by the end of 1395, showing an increase of 350%. The JCPOA played a significant role in bringing the National Iranian Copper Industries Company to the international markets.

Cut in Finished Cost

The National Iranian Copper Industries Company, by choosing scientific and management methods, has succeeded in drastically reducing the finished cost of the products. The finished cost of copper concentrate (content) during 1394 and the first three quarters of 1395 was over 7.7%. During this period, the finished cost of copper cathode of the refinery and leaching (average rate) (ton/dollar) was slightly more than 6%. 

Increase in Energy & Water Efficiency & Environmental Measures

In line with the cut in finished costs as well as protection of the environment, the company has managed to significantly reduce its consumption from 1393 up to the end of the three quarters of 1395. Water consumption has reached 99 ton cubic meters from 120 ton cubic meters. Energy consumption dropped from 961 to 938 kw/h, gas oil consumption from 0.55 ton liter to 0.39 ton liter and gas consumption from 15 to 10 ton cubic meters.

In line with coping with water crisis, the required measures have been taken through implementation of projects for renewed purification of water, methods to prevent water evaporation, productivity in water consumption and participation in water transfer from the Persian Gulf to Kerman region, as well as some other projects.

Also, in order to realize sustainable development and protect the environment, projects have been implemented or are under implementation such as:

  •  Review of development projects with environmental perspective

  •  Protection of environmental resources (water, soil and other energies)

  •  Establishment of acid plants for the prevention of release of SO2

  •  90% reduction of CO2

  •  Protection of regional plants, livestock and animals

Explorations

Explorations are one of the most important rings of the mining chain. In line with this, studies are underway for finding the location in East Azerbayjan and Kerman provinces in an area of over 9 thousand square km. Meanwhile, planning is on the agenda for finding the regional locations in south of Kerman Province as well as in Semnan, West Azerbayjan and South Khorasan provinces in an area of about 12 thousand square km. Moreover, plans are being formulated for carrying out basic airborne geophysics studies in an area of 17 thousand square km.

In line with the new explorations with the approach of exploration of hidden and exotic deposits, the National Iranian Copper Industries Company has embarked on holding partnership with the following companies:

  •  Int'l Reservoir (British-Canadian)

  •  Japan’s Jogmec

  •  Georgia’s IMB

  •  Shahid Bahonar University of Kerman and UBC of Canada for southeastern areas

  •  Tabriz University and UBC of Canada (for northwestern areas)

Meanwhile, the policy of the company is using modern global technology and focusing on hidden, exotic, skarn and deep deposits.

Developmental Projects up to 1399 (2020-2021)

Latest Status of NICIC Projects

No.

Project

Operation year

Total investment
Billion/rial

1.

Development of Sarcheshmeh Melting

1395 (2016/17)

11,740

2.

Infrastructure of Sarcheshmeh concentrator factories 

1397 (2018/19)

4,570

3.

Construction of Kerman acid factories

1396 (2017/18)

7,440

4.

Construction of Khatoon Abad refinery factory

1395 (2016/17)

6,360

5.

Darrehzar mine and concentrator factory project

1398 (2019/20)

15,760

6.

Khatoon Abad smelting development project

1398 (2019/20)

5,690

7.

Sungun heap leaching

1398 (2019/20)

1,340

8.

Sungun hydrometallurgy (leaching concentrate)

1398 (2019/20)

9,630

9.

Chehel Koureh Zahedan mine and concentrator factory project

1395 (2016/17)

2,760

10.

Dar Alou mine and concentrator factory project

1398 (2019/20)

15,570

11.

Chah Firouzeh mine and concentrator factory project

1398 (2019/20)

14,140

12.

Taft copper mine project

1399 (2020/21)

9,900

13.

Combined cycle power plant

1396 (2017/18)

12,100

14.

Sarcheshmeh slag flotation

1398 (2019/20)

900

15.

Sarcheshmeh chemical fertilizer

1398 (2019/20)

6,350

16.

Integrated water master plan

1398 (2019/20)

8,190

17.

Integrated cycle power plan

1398 (2019/20)

3,350

18.

Sarcheshmeh mine development project

1397 (2018/19)

2,990

 Total in billion rials (one euro = 40000 rials)

138,780

By considering the table below and operation of three projects for concentrate Phase 2 of Sungun Copper and concentrate of Phase 2-2 of Sarcheshmeh Copper in early 1394 (2015-2016) as well as operation of Phase 1 of Khatoon Abad refinery, the required investment for developmental projects would be over 150170 billion rials. The total cost of the developmental projects implemented from 1385 (2006-2007) up to the end of the first half of 1392 (2013-2014) is equal to 29960 billion rials. This figure increased to 60350 by the end of the third quarter of 1395 (2016-2017) which shows the high speed of the development of the National Iranian Copper Industries Company under the government of President Hassan Rouhani. The company in order to reach a production capacity of 420 thousand tons copper content concentrate by the year 1400 (2021-2022) is in need of attracting 60 thousand billion rials outside the company resources.

Opportunities to Attract Foreign Investors to Develop Upcoming, Ongoing Projects

Given that the National Iranian Copper Industries Company in its development program, has been preparing and shaping four mines in the past years and purchased most of the equipment and devices related to the concentrate factories for the production of concentrates from those mines, it has invited the private sector and foreign investors for participation in those giant plans.

Features of the mines are as follows:

Project: Equipping of mine and constructing concentrate factory in Darreh Zar

Geographical location: Kerman Province, northeast of the town of Sirjan

Mineable reserve: 218 million tons with a grade of 0.38%

Aim: Equipment and exploitation of Darreh Zar mine in Kerman with a capacity of 11 million tons of sulfide ore with a grade of 0.38% and annual production of 150 thousand tons of copper concentrates with an average grade of 26%

Estimated time of commissioning: 1398 (2019-2020)

Amount of investment                                

204 million euros

7600 billion rials

Amount of the contract and the cost for the purchase of crushing equipment                                                                    

74 million euro contract

61 million euros paid

 Project: Daralu mine equipment and concentrator construction, Kerman

Geographical location: This deposit is located in Kerman Province, 120 km south of the city of Kerman

Mineable reserve: 143 million tons with a grade of 0.39%

Aim: Equipment and operation of Daralu mine with a capacity of 7 million tons of sulfide ore with a grade of 0.39% and annual production of 100 thousand tons of copper concentrate with an average grade of 27%

Estimated time of commissioning: 1398 (2019-2020)

Amount of investment                            

120 million euros

9550 billion rials

Amount of the contract and the cost for the purchase of crushing equipment                                            

55 million euro contract

48 million euros paid

Project: Mine equipment and construction of concentrate factory in Chah Firouzeh

Geographical location: This deposit is located in Kerman Province, 32 kilometers north of Shahre Babak

Mineable reserve: 140 million tons with a grade of 0.37%

Aim: Equipment and operation of Chaah Firouzeh with a capacity of 7 million tons with a grade of 0.41% and annual production of 100 thousand tons of copper concentrate with an average grade of 25%

Estimated time of commissioning: 1398 (2019-2020)

Amount of investment                          

131 million euros

8903 billion rials

Amount of the contract and the cost for the purchase of crushing equipment

71 million euro contract

48 million euros paid

Project: Taft Copper Mine project

Geographical location: Aliabad and Darreh Zereshk deposits in Yazd Province, southwest of the city of Yazd

Amount of usable storage pits (mineable): Aliabad, 49 million tons with a grade of 0.48% - Darreh Zereshk, 81 million tons with a grade of 0.39%

Aim: Equipment and exploitation of Taft copper mines (Aliabad and Darreh Zereshk) with a capacity of 7 million tons of sulfide ore and annual production of 118 thousand tons of copper concentrate with an average grade of 26% and annual production of 400 kg of gold bullion

Estimated time of commissioning: 1399 (2020-2021)

Amount of investment                            

120 million euros

9740 billion rials

Amount of the contract and the cost for the purchase of crushing equipment                                                      

55 million euro contract

48 million euros paid

Important: It should be noted that it is possible for the company’s presence in international consortiums for the operation of and participation in the above-mentioned development projects.

Angles of Cooperation with Foreign & International Companies

The National Iranian Copper Industries Company has been interacting with the world renowned companies for long years. The three major domestic copper concentrate plants – Sarcheshmeh, Miduk and Sungun – operated under the supervision of NICIC from 1378 (1999-2000) up to 1385 (2006-2007). It had also signed contracts with Metso Mineral Company of Sweden for construction of the plants and purchase of equipment. The company has also had cooperation with major foreign companies such as Swedala (Metso Minerals), SRK, RIO TINTO, Sandvik, FLSmidth, CSA, Outo TEC, Knight Piesold, SNG, Hatch, Mintek, Techpro, etc. Meanwhile, the company is a member of the international copper studies group in Portugal and is in constant contact with creditable scientific and analytical institutions of the world and maintains constant consultations with CRU Metal Bulletin and Wood Mackenzie institutions. 

Possibility of Exporting Technical & Engineering Services

In the copper industry and at different times, experts and talented engineers have served in different fields with an experience of more than 50 years in mines and close to 40 years in giant copper production industries and now a skilled, specialized and veteran workforce has been trained at different levels in order to play key roles in the fields of services and transfer of knowledge to the future generation as well as to the other side of the borders.

On this basis:

1) In the field of research: The ability required for the export of different services as well as survey and exploration of the demanded cases with regard to having a highly capable research center at Sarcheshmeh Copper is fully available and the center is ready to conduct any research work related to the copper industries, similar to any part of the world.

2) In the field of manufacturing equipment and spare parts for various copper industries: There is the possibility for making the majority of highly consumed parts and equipment in different plants ranging from concentrate, smelting and refining with the best quality and global standards and with the supervision of the National Iranian Copper Industries Company engineers  with regard to the valuable software, hardware and intelligent asset available and the huge capacity of the domestic manufacturers, at satisfactory level and competitive prices. In this regard, the record of manufacturing the equipment and parts and the progressive speed of the copper company is a good evidence to this claim.

3) Export of knowledge and different engineering services: There is a possibility for the export of engineering services in different executive and operational activities with different devices, furnaces and basic equipment as well as in repair of mining machineries and different devices of the copper production line at competitive prices.

4) The National Iranian Copper Industries Company is ready to receive proposals for the formation of joint company (JV) for the implementation of international projects in all parts of the world.

 

National Iranian Copper Industries Co.

No. 2161, Valie-asr Ave., Tehran, Iran

Tel: (9821) 82138000

http://www.nicico.com

 

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  May 2017
No. 83