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Iran's Sepahan Oil Company (SOC) signed an oil sector partnership agreement with Germany's EDL to upgrade the quality of its raw materials including motor and industrial oils, announced the first deputy managing director of SOC.

Speaking to Sputnik, Masoud Ahmadzadeh further said that he discussed the purpose of the partnership agreement in the context of the US sanctions as well as the benefits that Iran would get from it.

"Unfortunately, I can't tell you the exact number of the contracts since it is classified information. The German EDL has strong ties with Iran, and it has been operating in the Middle East and Iran for about 20 years. The company is interested in continued cooperation with Iran. However, the German government, as well as the European Union, allowed these companies to work with Iran, and support some of the companies so that the American restrictions would not affect their performance."

According to Ahmadzadeh, SOC held talks on the issue of sanctions with these companies. Fortunately, he added, EDL did not consider the sanctions a problem, so the sides managed to sign a partnership agreement.

Ahmadzadeh mentioned the introduction of new technologies to upgrade the quality of production is among the areas of cooperation between the two companies.

"Our company specializes in oil refining as well as commercial oils and oil production. Our challenge now is to attain a new level in creating wax concentrates. Rubber, textile and wood-working industries use wax concentrates. We are going to go further and start manufacturing highly-refined wax for use in healthcare and food industries," he pointed out.

Ahmadzadeh said SOC plans to implement this project jointly with EDL, and this will have many financial benefits for Iran as the price of the wax concentrate is now between $550 and $600 while highly refined wax costs $1,100 per ton.

He said large companies such as Total which are leaving Iran are being replaced by small and medium-sized European companies.

"As the sanctions make large companies leave Iran, smaller European firms willing to cooperate with Iran take this opportunity to replace them and the process has already started."

He pointed out that Germany's EDL was one of the first companies to sign a contract with Iran.

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Iran's lead and zinc exports during the five-year period to March 2018 reflected an increasing trend despite the shortage of raw materials faced by the domestic industry, according to figures by the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).

According to some sources, the history of lead and zinc industry in Iran dates back to more than seven centuries ago.

Lead exports

Iran exported lead worth $745 million in the five years to March 2018. In the year to March 2018, lead exports generated the highest annual revenue ($214 million) in the five-year time-span. The value of exports was the lowest ($104 million) in the year to March 2014.

Lead exports in the 12-month period to March 2017 recorded the highest year-on-year growth within the five-year period, with an increase of 35 percent compared to the year earlier, to amount to $174 million from $129 million.

The lowest year-on-year growth in the 60-month time-span, however, pertained to the year to March 2016, when exports of the mineral brought in $124 million to set a five-year low record of one-percent.

In the year to March 2018, India was Iran's biggest lead importer with purchases amounting to $59 million (27.6 percent). In the 12-month period to March 2017, India had bought lead valued at $41.8 million from Iran.

During the 12-month time-span to March 2018, South Korea ($50 million) and the UAE (46.7 million) were the second and third biggest lead importers from Iran. Turkey and Indonesia are other lead export destinations in the same period.

Zinc exports

In 2017, Iran exported zinc ingots valued at $302 million to rank 15th among the world's top exporters. In this year, Iran accounted for 1.6 percent of the total global zinc exports. In 2016, zinc exports fetched $227 million in revenue for Iran.

This comes as in 2017, South Korea, the Netherlands and Canada exported $1.6 billion (8.8 percent of the total global exports), 1.41 billion (7.5 percent) and $1.4 billion (7.4 percent) worth of zinc ingots to be the world’s top three exporters of the product.

According to Islamic Republic of Iran Customs Administration figures, the value of Iran's zinc ingot exports amounted to $1.73 billion during the five-year period to March 2018.

The main importers of Iran's zinc ingots are Turkey ($216 million), India ($41 million), Taiwan ($17 million), the UAE and South Korea.

Zinc ingot imports

In 2017, China was the biggest importer of zinc ingot in the world with imports amounting to $2.49 billion. The US and Germany followed China by purchasing $2.23 billion and $1.85 billion worth of zinc ingots, respectively.

In the same year, the value of Iran's zinc ingot imports reached $5.7 million to account for 0.04 percent of the world's total imports. The figure stood at $8 million in 2016, helping Iran account for 0.06 percent of the total global zinc ingot purchases.

Production

Unofficial figures show that following China, Kazakhstan and India, Iran is the world's fourth biggest Lead and zinc producer, IRNA reported.

During May 22-June 21, lead and zinc production in the northwestern Iranian province of Zanjan witnessed a 33-percent growth, year-on-year, to reach 122,381 tons. In this period, zinc and lead output in the central Iranian province of Isfahan registered a rise of 95 percent to stand at 5,306 tons compared to the same period last year.

Zinc and lead production in these two provinces, during March 21-June 21, showed an increase of 85-percent (Zanjan) and a rise of 112-percent (Isfahan) year-on-year, to reach 371,760 tons and 15,298 tons respectively.

In this period, the two provinces jointly produced 387,057 tons. This was 86 percent higher than the figure for the same time-span last year.

International figures show that per capita zinc consumption in Iran stands at 1.14 kilograms, whereas, the figure is 5.9 kilograms and 2.5 kilograms in western Europe and China, respectively.

Obstacles to production

The main obstacle to Iranian lead production industry currently pertains to processing and producing lead ingots.

Having low productivity, the technologies presently used in Iran are not efficient enough to enable the country to import sufficient mineral soil. Therefore, Iran is required to make a sharp improvement in the technologies it employs to be able to boost productivity.

The other problem faced by the domestic lead industry is a lack of banking facilities.

A precious treasure

Located 115 kilometers southeast of the central Iranian city of Yazd, Mahdi Abad zinc and lead mine is among the world's biggest lead and zinc resources and a precious treasure for the country.

In the year to March 2017, IMIDRO — under the supervision of the Iranian Ministry of Industry, Mine and Trade — handed over the mine's operations to a domestic private consortium.

The mine has a proven 154-million-ton lead and zinc reserve.

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French Finance Minister Bruno Le Maire said he is hopeful that turboprop planemaker ATR would get permission from the US to deliver eight regional planes to Iran before August 6, when sanctions against Tehran kick in.

"I am hopeful that the United States will give us permission to deliver these ATRs," Le Maire told French broadcaster BFM TV.

"There were eight to be delivered before August 6," he added, highlighting the 'significant share' of the order for ATR's turnover.

Deliveries of turboprop aircraft were halted in May after the withdrawal of the United States — which must approve any export of aircraft containing more than 10 percent US-made components — from the Iran nuclear deal and the return of the US sanctions regime against the Islamic Republic.

The equally-owned group by Airbus and the Italian Leonardo had warned earlier this month of the 'serious implication' of the decision.

Le Maire expressed his optimism for other sectors, without going into detail.

"I've been negotiating for weeks with my counterpart, US Treasury Secretary Steven Mnuchin, and I'm hopeful we'll get on a number of topics that directly affect our SMEs (small and medium-sized enterprises) and our jobs in US-owned territories," he said.

"I am also fighting so that in the health sector, in the agro-food sector, which are now out of sanction, there may be funding channels that remain open," said the French minister.

France had sought, along with other European countries, exemptions from US sanctions for its companies trading with Iran, a request to which the United States objected.

A top US official made it clear last month that the US government was unlikely to approve a new request by ATR to sell more turboprops to Iranian carriers.

The official likewise said the US government was unlikely to issue any licenses that would allow companies like Airbus and ATR to continue supporting aircraft in service with Iranian airlines.

ATR Chief Executive Christian Scherer warned last month of 'serious damage' to ATR's finances from the breakdown of deals to sell 20 planes to national flag carrier Iran Air, eight of which have been delivered so far.

Iran received the first four ATR aircraft last May, two more in September, beside another two in December, with the rest due to be handed over to the country by the end of 2018.

The first group of sanctions on Iran's automotive sector, gold trade and other industries will snap back on August 6. Further sanctions on oil and transactions with the central bank of Iran will come into effect November 4.

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Economic Desk

Gasoline output of Persian Gulf Star Refinery hits record

Exports from South Pars, Iran’s hub of energy, have increased 22 percent in the first four-month period of the current Iranian year (March 21-July 22, 2018).

Embracing the world’s largest gas field, South Pars, is also a hub for Iran’s non-oil exports, petrochemicals and gas condensates.

Ahmad Pourheydar, the director general of the Customs Office in Pars Special Economic-Energy Zone, told that nearly $2.6 billion worth of gas condensates (3.92 million tons) have been exported from South Pars, which shows an increase of 14 percent in terms of value compared to last year.

He also said $3.26 billion worth of non-oil products (5.98 million tons) have been exported from South Pars.

Moreover, the exports have soared by 10 percent in terms of weight, and by 29 percent in terms of value, compared to figures of the same period last year, the official said.

Pourheydar noted that in total, exports from South Pars during the four-month period show a 22-percent increase.

The hike comes despite the possible reimposition of US sanctions on Iran.

Gasoline production

Meanwhile, the gasoline production capacity of the Persian Gulf Star Refinery, also known as the Bandar Abbas Gas Condensate Refinery, has reached 26 million liters per day, the plant's CEO said.

Mohammad Ali Dadvar told Shana that by the inauguration of the refinery’s second phase, its gasoline production reached 24 million l/d but another 2 million l/d was added to its production capacity by tapping the spare capacity of the plant’s distillation unit and phase one.

He further said that the hydrogen filtration unit for the third phase of the refinery was being installed and would come on stream within the next month to bring the plant’s daily gasoline production to 30 million liters per day.

The refinery is currently supplying 7 million l/d of gasoil, which will reach 10 to 12 million l/d in the near future, the official added.

Once operating at full tilt, the refinery will supply 36 to 40 million l/d of gasoline. Its premium gasoline output will also be at 27 million l/d from currently 10 million l/d.

The plant is designed in three phases each operating with the nameplate capacity of 12 million l/d of gasoline.

Once the third phase of the plant comes online, Iran would be poised to become a gasoline exporter.

The Persian Gulf Star Refinery is the world’s largest gas condensate refinery which is 70 percent developed by domestically-built equipment, fully installed by Iranian companies, and 95 percent operated by a domestic workforce.

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