December 03, 2008
Kahnuj titanium complex progress stalled
MEED reported that progress at Iran's USD 500 million Kahnuj titanium dioxide complex has stalled while the government searches for international investors to take shares in the plant. Sources said that Tehran's decision to privatize the complex, which was originally to be state funded, is continuing to delay work that was meant to start 9 months ago.
Some local companies have shown an interest in developing the complex in southern Kerman province, but they have yet to find foreign parties to provide the technology and finances required to carry out the work.
When work on the project was initially tendered in 2006, the client, Iran Mines & Mineral Industries Development & Renovation Organization said that it would be state funded. However, it has since changed its position.
The complex consists of 4 parts, a mine to provide feedstock for the plant, a beneficiation unit of 130,000 tonnes a year, a slag processing unit with capacity of 70,000 tonnes a year and a pigment production plant of 50,000 tonnes a year. The pigment will be used domestically for production of paint, polymers, printing ink and textile dye, as well as in the aviation industry.
Until recently, consultancy services at Kahnuj were provided by the local Mr Kar Azin Consulting Engineering Company. But the firm's work has been suspended because of the slow privatization process. Kar Azin has completed feasibility studies on the project with a German company. The results of these studies, based on a facility producing 15,000 tonnes a year of titanium dioxide pigment, are believed to be positive.
The program has been frustrated by a lack of investor appetite for the shares. This is partly due to a lack of appetite among domestic investors and partly because overseas investors are wary of investing in the country while the controversy over its nuclear power program continues. Among the projects that are suffering as a result are a series of infrastructure schemes, including a rail link between the port of Chabahar and Iran's eastern neighbors.
