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Jan 29.18 Magnesium Production: Advantage Iran?
Iranís first and only industrial magnesium plant was established in 2014 with private investment and indigenous technology. The facilityís capacity is 6,000 tons/year, but only half that is utilized. Iran exports most of its output primarily to Germany and the Czech Republic due to limited local demand.

Yet Iran boasts distinct advantages in magnesium production, among them large reserves, cheap and abundant energy resources and a lower-paid workforce, all of which have long been identified but never adequately capitalized.

The country has access to magnesite and dolomite, as the two main sources of magnesium, in mines throughout the nation,
according to a recent report by Majlis Research Center (The Research Center of Islamic Legislative Assembly, the research arm of the national parliament). And Iranís untapped potential for production of magnesium could position the energy-powerful country as a competitive global producer, especially since the commodityís production cost is mostly based on energy costs.

Global demand for the metal (the ninth most abundant element in the universe, and the fourth most common in the Earth; magnesium metal is the third most commonly used structural metal, after iron and aluminum) is rising across the industrial spectrum, particularly in the automotive and aerospace industries, where itís prized for its strength and lightness.

Because of its low weight and good mechanical and electrical properties, magnesium is also widely used in the manufacturing of mobile phones, laptop and tablet computers, cameras and other electronic components. Worldwide demand for magnesium is forecast to reach over 1.2 million tons by 2020, according to research by United States Council for Automotive Research.

China leads the world in magnesium production (with Russia in second place), accounting for 85% of the global 1 million-ton output. But China is slowly reducing output due to environmental concerns as it utilizes coal, and any retreat would represent an opportunity for new producers, including Iran. The Middle East and North Africa marketsí demand for magnesium is rising because of its increased use in steel and aluminum industries.

Iran is the largest automaker in the MENA region, and is well positioned to produce and use magnesium compared to aluminum, one of the primary materials used in the automotive industry.

Iranís annual demand for magnesium is about 1,000 tons, with imports at 918 tons, according to Islamic Republic of Iran Customs Administrationís data for the fiscal year March 2016-17. As the countryís automotive and aluminum industries expand, that demand is forecast to exceed 4,000 tons per year by 2020. Expanding production could also allow Iranian plants to cash in on Europe and Persian Gulf littoral statesí aggregate 250,000-ton annual demand for the material.

Magnesium is 30% lighter than aluminum, easier and cleaner to produce (due to utilizing natural gas in the production process), and its raw material (dolomite) is cheaper and more abundant compared to aluminumís scarce and costly bauxite.

Iranís cheap workforce can also be a factor in the domestic industryís growth, as labor expenses are about $1.2 per hour, compared to Chinaís $2.5 and Turkeyís $5.3.


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