Azerbaijan reduces iron ore exports

The Dashkesan ore-dressing plant significantly reduced in 2013 the volume of production and export of iron ore and iron ore.

According to the State Statistics Committee , last year the volume of iron ore production in the country amounted to 141.4 thousand tons, 31.8% less than in 2012 . In addition, 38 thousand tons of goods were not implemented by the end of the year.

In April last year the government suddenly announced the creation of CJSC Azerbaijani Steel Production Complex with 100 % participation of the state, while terminating the contract with the company Det.Al Limited ( UK) on the privatization of Dashkesan Filizsaflashdyrma from 2006.

Analysis of official figures on the volume of production shows that the company Det.Al Limited still has invested in the company Dashkesan at least a portion of the promised investments of 235.1 million manats. Otherwise, it would be impossible to explain the fourfold increase in the production of iron ore in 2011 ( 214.3 thousand tons). In 2012 ( 207.3 thousand tons) production decreased slightly , possibly price fluctuations on the world markets , when iron ore was worth just under $ 100 per 1 ton for the first time since 2009. In 2009, iron ore production in Azerbaijan was at zero.

Earlier this year, iron ore prices were held just below $ 130 per ton, at the lowest level since July 2013, is noteworthy that export prices for Azerbaijani non-agglomerated iron ore much cheaper world prices , which may be associated with low iron content and high transportation costs. According to the State Customs Committee , the exporting company declared , for example, in 2012 a tonne of ore at $ 26.36 . Export data for 2013 are not yet available .

In 2012, the exported 210,550 tons of iron ore had a total declared value of $ 5,551,400. The goods were delivered to the UK (169,850 tons, $ 4,586,000), Hong Kong (27,350 tons, $ 738,000) and Georgia (13 350 tons, $227,000) .

The current situation around Dashkesen Filizsaflashdyrma, where 99.22 % of the shares (257.4 thousand) are controlled by the state represented by the State Committee on Property, remains unclear. Formally, the state announced plans for design and construction cycle of enterprises of mining, processing and production of steel and finished products in Ganja and Dashkesan. This resulted in the order of the President Ilham Aliyev on 23rd April 2013. However, since that time, nothing has changed : there are no statutes or Company management structure and not even formed an insignificant share capital of 2 million manat.

But parallel work in this direction is actively carried out by the private company Baku Steel Company. In October 2013 the company started construction of an integrated steel complex in Ganja. In January this year, the President spoke about the big plans in the steel industry for this year, but gave no details.

Recall that the first transaction for the sale of shares in JSC Dashkesan Filizsaflashdyrma controlling iron ore deposits with reserves estimated at 350 million tons, took place in 2003 . The winner of the contest became a British investment company Aldex Limited, which is committed to invest on modernization of production of $ 50 million in 2005-2006. However, the contract was terminated under the pretext of non-fulfillment of contractual obligations. - 08B-