Persian Gulf Saba Steel Launches €200M Expansion to Boost HBI Production Capacity
TEHRAN – Persian Gulf Saba Steel, a key player in Iran's steel production industry and the country’s first producer of Hot Briquetted Iron (HBI), has unveiled a significant expansion project worth €200 million. This move, spearheaded by the National Pension Fund of Iran, aims to substantially boost the steel company’s production capacity and strengthen Iran's steel sector.
The expansion project will focus on the construction of a second direct reduction unit at the Saba Steel plant, located in the Hormozgan Province of southern Iran. Once complete, this facility will add 1.76 million metric tons of HBI production capacity annually. The project is set to create 400 direct jobs and approximately 5,000 indirect jobs, offering a significant boost to both local employment and the broader Iranian economy.
About Persian Gulf Saba Steel
Persian Gulf Saba Steel is a subsidiary of the National Pension Fund's investment arm, which holds a significant stake in the steel sector. The company, which currently produces 1.3 million metric tons of HBI annually, operates in the Hormozgan Province, approximately 13 kilometers from the Persian Gulf Mining and Metal Industries Special Economic Zone in Bandar Abbas. Known for its advanced production processes, the plant is a key producer of HBI, a compressed form of sponge iron, which is a vital component in the global steelmaking industry.
HBI is crucial in the production process, as it allows manufacturers to efficiently convert scrap metal into usable steel, thereby improving production efficiency and promoting sustainability within the sector. The new expansion aims to meet increasing demand for steel while advancing Iran's position in the global steel market.
The Expansion Project
The expansion project is a multi-phase effort that focuses on enhancing the overall production capabilities of Persian Gulf Saba Steel. With an investment of €200 million, the company is constructing a second direct reduction unit that will significantly increase its HBI production capacity. The new facility, located on a 10-hectare site, is expected to play a pivotal role in enhancing Iran’s steel industry and supporting its economic development.
The new direct reduction unit is expected to start operations soon, and once completed, it will elevate the company’s total production capacity to 1.7 million metric tons of HBI annually. This will not only make Persian Gulf Saba Steel a stronger competitor on the international stage but also increase Iran's steel production to meet growing domestic and international demand.
Economic and Social Impact
The expansion is set to have substantial economic implications for Hormozgan Province and the wider region. The direct creation of 400 jobs and indirect employment for 5,000 workers underscores the importance of this project in boosting local economies. Hojjat Mirzaei, the head of the National Pension Fund, visited the plant during the expansion project, emphasizing the pension fund’s commitment to the industrial development of Iran.
Mirzaei also discussed plans to ensure a stable energy supply to the plant, which is essential for the smooth operation of the steel production process. One option under consideration is the construction of a dedicated power plant that will meet the electricity needs of Saba Steel and other industries in the region.
Hormozgan Governor Mohammad Ashouri Taziani expressed his strong support for the expansion, highlighting the National Pension Fund's investments in various sectors, including steel, tourism, fisheries, and energy. The governor emphasized that the ongoing projects, including the 500-megawatt power plant and the expansion of fisheries and coastal tourism, will significantly contribute to job creation and economic growth in the province.
Strategic Importance of Steel in Iran’s Economy
The steel industry is a critical pillar of Iran's economy, serving as a cornerstone for infrastructure development, manufacturing, and energy production. The expansion of Persian Gulf Saba Steel will help meet both domestic and international demand for high-quality steel products. As a key producer of Hot Briquetted Iron (HBI), Persian Gulf Saba Steel plays an integral role in enhancing the efficiency of the steel production process.
The increased capacity of the new direct reduction unit will contribute to the national and regional economy, particularly by improving the sustainability of steel production and ensuring that the steel industry can meet future demands.
The project is expected to improve Iran's steel exports, which will directly impact the country's revenue generation and further establish Iran as a leading producer in the global steel market.
Future Outlook: Sustainable Development and Regional Growth
In addition to the direct benefits to Persian Gulf Saba Steel, the expansion project also serves as a model for future industrial development in the region. The construction of a dedicated power plant will support the region’s industrial operations and help ensure a stable energy supply for steel producers and other local industries.
Moreover, the ongoing steel projects in the province, which have a combined capacity of approximately 3 million metric tons, will significantly contribute to national production and economic prosperity. This increase in production capacity will also help meet the growing global demand for high-quality steel.
As Hormozgan Province continues to develop its industrial base, the National Pension Fund’s investments in sectors like fisheries, coastal tourism, and steel will continue to foster economic diversification and job creation. These efforts, along with investments in port infrastructure, will enable the region to take full advantage of its strategic geographical location and its proximity to the Persian Gulf, a vital maritime transport hub.
Key Takeaways:
• The National Pension Fund of Iran has launched a €200 million expansion project at Persian Gulf Saba Steel to increase production capacity.
• The second direct reduction unit will add 1.76 million metric tons of Hot Briquetted Iron (HBI) capacity annually, making a significant contribution to Iran's steel industry.
• The expansion is set to create 400 direct jobs and 5,000 indirect jobs, boosting local employment and the regional economy.
• The plant, located in Hormozgan Province, is part of Iran's broader strategy to increase its steel production capacity and strengthen its position in the global steel market.
• The National Pension Fund has committed to ensuring a stable energy supply for the plant, including plans for a dedicated power plant.
• The expansion of Persian Gulf Saba Steel will increase its total production capacity to 1.7 million metric tons annually, supporting national production and revenue.
• Ongoing steel projects in Hormozgan Province have a combined capacity of 3 million metric tons, contributing to economic growth and job creation.
• Investments in fisheries, tourism, and port infrastructure in the region are driving economic diversification and strengthening the local economy.
