4 traders- Japan’s Sojitz Corporation has signed a basic agreement with Iran to study the production of steel sheets in the country’s southeastern port of Chabahar.

Japan’s Sojitz Corporation – the country’s sixth largest trading enterprise – has signed a basic agreement to study the production of steel sheets in Iran’s southeastern port of Chabahar.

The Japanese company signed the agreement with Iran’s Industrial Development and Renovation Organization (IDRO) – the operations arm of the country’s Ministry of Industry, Trade, and Mine.

IDRO Managing Director Mehdi Karbasian was quoted by the domestic media as saying that the project would mark a major milestone in Iran’s efforts to increase its production of steel products to as high as 55 million tons per year.

Karbasian said that Sojitz would present its research findings to IDRO by September, adding that this would be followed by two months of negotiations to seal a final agreement over production of steel sheets.

The official further emphasized that the agreement would be implemented in line with a credit line of above $10 billion that Japan has allocated for Iran, IRNA reported.

Another Japanese company – Kobelco – is developing Mokran Steel Complex in Chabahar with a production capacity of 3 million tons of sponge iron per year.

The project that Sojitz is studying is meant to be launched once Mokran Steel Complex reaches the production capacity of 1.6 million tons per year, IRNA added.

Iran is the biggest steel producer in the Middle East after Turkey, according to the World Steel Association. Output rose to 1.5 million tons last April from 1.3 million tons at the end of the previous year before the international sanctions were lifted in January.

The country has already devised serious plans to increase its steel production capacity to 55 million tons per year from the current level of roughly 17 million tons per year by 2025. The country’s export capacity is also expected to rise to above 13 million tons per year.

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