Iron Ore self-sufficiency as an advantage of Iranian Steel Exporters Keyvan Jafari Tehrani Member of the Board & Head of Int’l Affairs

Contents 1 Iran Iron Ore Industry Future of Iron Ore Mining and Steel Industry in Iran Iron Ore to Steel Value Chain Strategic Steel Export Plan of Iran Billet vs. Scrap Competition Conclusion 2 3 4 5 6

Iran Iron Ore Industry

Iron Ore Mines, Grade and Reserve Private (188) and Government Mines (11): Totally 199 Total Iron Ore Decisive Reserves: 4 Billion Tons Type of Iron Ore: (approx.): 60% Magnetite 40% Hematite Average Fe content (Iran): 52 % Average Fe content (World): 42% Figure 1: Iran Iron Ore Reserve

Iran Iron Ore Reserve & Grade Tonnage (Thousand t) Grade (Fe %) Figure 2: Iran Iron Ore Reserve and Grade

Figure 3: Iran Iron Ore Exploration Average Depth of Drilling: < 20 m Total Mining Drilling in Iran: 3.2 Million Meters % of Explored Area: < 10 % Estimated Required Investment: US 20 Billion in 4 years Figure 3: Iran Iron Ore Exploration

Iran Iron Ore Production/Export Figure 4: Iran Iron Ore Production 2009-2015 (Source: USGS, Feb-2016) Figure 5: Iran Iron Ore Export 2006-2015 (Source: USGS, Feb-2016)

Figure 6: The Impact of Iron Ore Price on Iran Iron Ore Production Iran Iron Ore Price Iron Ore Production (Mt) Iron Ore Price ($/t) Figure 6: The Impact of Iron Ore Price on Iran Iron Ore Production

Iran Iron Ore Production Forecast 1991 1992 1993 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2023 2020 2021 2022 2024 2025 Growth rate: 11% Mt Growth rate: 6 % Growth rate: 4 % Figure 7: Iran Iron Ore Production Forecast

Figure 8: Global Iron Ore Demand

Future of Iranian Iron Ore Mining & Steel

Global Crude Steel Production 15 year of forecast Figure 9: Global Crude Steel Production, 1900 - 2050

Iran Crude Steel Production Figure 10: Iran Steel Production 1980-2015 (Source: World Steel Association, Feb- 2016)

Iran Steel Consumption Figure 11: Iran Steel Overview (Mt) (Source: World Steel Association, Feb- 2016)

Iran Steel Export/Import Figure 12: Iran Steel Export 2000-2014 Figure 13: Iran Steel Import 2000-2014 (Source: World Steel Association, Feb-2016)

Iran Forecast of Steel Growth Figure 14: Iran Forecast of Steel Growth

Future of Iron Ore Mining and Steel Figure 15: Iran Steel Comprehensive Plan

Location of Iron Ore Mines & Steel Mills Legend Crude Steel Mill Pig Iron Unit Cast Iron Unit Pellets Unit Concentrate Unit Iron Ore Mine Figure 16: Location of Iron Ore Mines & Steel Mills

New Steel Mills Under Construction Chabahar Free Zone: 10 Mt Persian Gulf Special Zone in B. Abbas: 10 Mt North East of Iran in Khorasan Provinces: 19.6 Mt Center of Iran in Kerman Province: 9.3 Mt Center of Iran in Yazd Province: 3.2 Mt Plan for Iron Ore Import in 2024-2025: Only 43 Mt

Iron Ore to Steel Value Chain

Steel Value Chain Figure 17: Decrement Added Value in Steel Value Chain (Source: World Steel Association, Mc Kinsy Steel Demand Model)

Critical Success Facts in Steel Business Figure 18: Critical Success Facts for Distribution Companies and Actions Areas

Billet vs. Scrap Competition

Figure 19:Scrap as a share of feed, 2002 -2012

Steel Production by Scrap Consumption Figure 20:World Steel Production and Scrap Consumption from 2005 to 2014 (Million Metric Tons)

Crude Steel vs. Scrap Consumption Figure 21: Crude Steel vs. Scrap Consumption Growth, 1982 - 2012

Figure 22: Scrap Scenarios, 1950 - 2050

Share of Scrap in Steel Production Costs Even in iron ore-consuming blast furnaces, scrap remains an important additive and can make up 10-20% of the total raw material mix Iron Ore Figure 23: Scrap as a Percentage of Steel Production Costs, 2015 (Source: LME, 2015)

Steel Export Strategy What is the company performance in the market and what actions to be taken to shape its future? What is the current competitive scenario? What is the basis of the competition in the product-market served?

Steel Export Strategy What are the critical success factor for business in region? Can it substitute volume business with project business and how will this impact cross selling? What should be the road-map to successes? What kind of business are required to meet the strategy?

Conclusion: Iran is a major country in iron ore reserve in MENA region. Cost of logistic in Iran is one of the most bottleneck issues. Importing iron ore/concentrate will increase the cost of production in steel value chain and make it less profitable to export. As a proportion of costs, movements in scrap prices can have a major impact on steel mill’s profitability.

Thank You Web site: www.iropex.ir Chador Malu Pellets Plant & Billet Mill Web site: www.iropex.ir Email: info@jtc-ltd.com Gol-e-Gohar Iron Ore Mine