Iran Alumina Company as the first producer of three strategic products "metal grade alumina", "aluminum hydroxide" and "alpha alumina" in the Middle East is active in Jajarm region in North Khorasan province activities and with the goal to complete the value chain in the region, have implemented the plan for production of aluminum ingots.  The company has put the planning for a 40-years production in their strategies and to achieve this goal it put increasing reserves of bauxite on the agenda. Here there is an Interview with Touraj Zare, CEO of Alumina Iran.

How have been the Alumina Company's performance in recent years in terms of production and mining products and  what changes have been done?
The company currently produces three strategic product including "aluminum hydroxide", "Metal-grade alumina" and "alpha alumina". Aluminum hydroxide for use in industries such as plastic, rubber, paper, polymers, chemical cable and wire, aluminum chlorides, poly aluminum chloride and etc. Metal grade alumina is mainly used in the production of aluminum ingots as well as being used as abrasive and refractory material and it is applicable in the glass and crystal industry, steel, electrical insulation and welding electrodes. Alpha also is being used in refractories and ceramic products and catalysts. The Jajarm Complex alumina production in last 3 years was about 240 to 250 thousand tons per year and during the first 4 months of this year about 80 thousand tons of alumina powder is produced. Increasing the productivity and reducing the cost of finished product in the mine and plant were among measures taken place during the last year in the company. The result in the mining sector was highly desirable And reduction of costs in the financial statements for the year 2015 to year 2014 was evident. Another important step was bringing extracted low grade bauxite to the production process in the past years. Although it cut production, but in the end it was in our favor and we could take back dead capital in previous years to production process. And although they were low grade but because we were faced with a shortage of supply of bauxite, they were precious for us.

Would you please explain about the history of the development plan of the company (ingot plant) and what changes it had met during this period?
At the beginning of our entry into the complex, the development of aluminum ingot plant projects was 45 percent an now it is 60 percent. And we plan to bring the project into operation next year. Primary planners defined the project in 11 packages and the goal was to use of local knowledge as much as possible, we have to worke with 11 contractor. At least part of that work was done by the former CEOs that were valuable, since the end of 2007 to 2012, the progress had been 45% in 7 years. But with the new strategy of IMIDRO which is the completion of development projects in priority and with full support of Doctor Karbassian and IMIDRO team, the plan had good progress during the past year. At present, the scheme disposition and all tenders required for its implementation has been defined and domestic and foreign contractors were deployed in the project and all projects were pre-paid. Most of these actions were done in 2015. Since the begining of 2016 all contractors entered the implementation phase. During this period, approximately 180 new jobs were created. Now the project has a very good situation and we hope we can provide the liquidity needed. We are trying to provide required resources (300 million dollars) and finish the project with the support of IMIDRO and meetings with operating bank. From the beginning of the project until the end of year 2014, 170 billion Tomans was spent and over the past year additional 50 billion Tomans has been spent.

How much is the current reserves of bauxite mines (as raw mineral) in Jajarm and how many years it can be supply the needs of the factory? and according to the 40 years production plan of Alumina Company what measures have been taken to increase bauxite reserves?
After the surveys, we found that we have reserve problem in the sense that extractable reserves will suffice only for 4 to 5 years. Thus, working for spplying reserves became one of our main strategies. That is, let's look at the long term and have at least 40 years planning for provisioning. Factory consumption is approximately one million tons of mineral raw material and we need to have a reserve that can be extracted 40 million tons. To achieve 40 million tons, three programs have been defined. First we do the complementary exploration not only in Jajarm mines, but also in mines of 4 provinces of Semnan, Yazd, Kerman and dKohgiluyeh-Boyer Ahmad because explorations haven't been don completely for all ranges. Therefore, we called for exploration and two contractor for Jajarm and Tash and Ganoo (in Semnan) were selected. For Yazd, Kerman and Medoon also we have prepared a package for exploration tender. As a result of two contractor activities we have 2500 m exploratory drilling monthly whereas before this amount was for one year. Fortunately, there were positive results from exploration in recent 2- 3 years and in the first assessments, mining and economic reserves have reached from 6 million tons to 9 million tons. That is 3 million tonhave been added to former bauxite reserves of this complex (in Jajarm, Yazd, Kerman and Shahrood) this amount will increase till the end of the year. The second issue, is getting help of the private sector to provide and improve storage of bauxite. For this purpose, we called all country's bauxite mines. In the meantime, 8 miner of bauxite visit us and participated in the competition and finally we agreed with two miners. we are signing contract with two other mines and we expect to bring them into the production cycle in two months.

In which areas the mines are active?
One of the mines which is located in 30 km from Jajarm with name of Shirin Cheshme (Sweet Spring) and a mine in "Nasrabad region of Yazd"  were purchased.

What are the challenges facing this complex?
Among the challenges of the complex which are global challenges, is the reduction of  the selling price of mineral products in global markets. This process is causing problem not only for this project but for the whole of the mining sector and mining industry in recent years. price of aluminain  Australian declined from 420 dollars over 2013 to around $ 280 (with shipping). Another challenge is the need to strengthen human resources and given the 20 years of its activity and hardness and hazardousness of the job, some forces retire and we have put education in the program so that we can supply quality human force. Also we have density of human resources due to recruiment over the years and we must provide them quality education. Another issue, is worn equipment and machineries that require basic maintenance.

Have you had certain achievements during this period?
In addition to activating two bauxite mines of the private sector and purchasing their products and also increasing reserves after explorations, our colleagues enjoy high capacity in terms of technical knowledge. For manufacturing equipment and parts, our priority has always been domestic made equipment and as a result we have localized many of components and equipments that led to sharp decline in costs. For example, maintenance of high pressure pumps, construction of the necessary gearboxes and manufacturing pump parts were among these actions. One of the problems is that sometimes a manufacturer makes specific required components with good quality but after a while the product quality drops. Currently we are separating companies committed to high quality from manufacturers of poor quality parts and equipment. Moreover we planned to put producer unit on a path that regularly increase the quality of production.

Given the increase in prices of mining products especially Aluminium in global market during recent months, what is your assesment about the price of these products in the future?
The valid international reports about aluminum, indicates that the prospect for this industry is positive and we will have rising prices. But the increase will be gradual. The increase in price will be visible in Iranian market too.

Is there any significant point that hasn't been raised?
By the end of November, contractors will do 12 500 meters of exploratory drilling will in bauxite mines and after that new tenders will take place and hence, exploration work will continue. Our forecast is that by the end of this year, we will carry out 20 thousand meters of exploratory drilling. Our capacity of aluminum ingots is 40 thousand tons . Also major equipment (such as electricity and Rectifiers and part of the cranes) were purchased for other phases of development and with the completion of the first phase, the second phase will begin, but it is subject to increased exploration reserves so that we can supply our aluminum ingots factory for a long time.

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