Esfahan Steel (Esco)’s new 400,000 tonnes/year rail mill should begin production by the beginning of the next Iranian year, which starts on 20 March, following delays owing to liquidity shortages, according to Esco deputy managing director sales and marketing Mansour Yazdizadeh. It is currently undergoing cold trials.

The new rail mill – the first in the Middle East – will target prospective rail demand in Iran, which is forecast to add around 12,000km to its existing rail network over the next decade. It will therefore reduce the need for imports and help retain foreign currency within the country, Yazdizadeh says in a report seen by Kallanish. The unit will also export product to the wider region.

Esco director of engineering Mehdi Nasr said last June that, besides local demand, major rail infrastructure investment in the Middle East and North Africa, and Southeast Asia will also provide Esco with ample rail demand (see Kallanish 17 June 2015). To this end the steelmaker plans to establish sales offices in Oman as a gateway for exports to MENA.

Esco’s rail output will conform to the international EN13674 standard. Types of rail produced will include UIC60 for high-speed lines, UIC54 and S49 for urban metro systems and U33 for slower trains.

Esco is Iran’s sole blast furnace-based steelmaker, registering 1.39mt of crude steel production in the seven months through 22 October.

Separately, Ali Saleh Abadi, director of Iran’s Export Development Bank, said during a recent meeting with Esco management that his bank is ready to finance the steelmaker’s exports. This is especially the case following the removal of Western sanctions. Iraq is a potential target market, he added. Esco exported 400,000t of steel in the first half of the Iranian year (to 22 September).