Sangan has emerged as one of Iran’s major mining and steel hubs, endowed with significant iron ore reserves and supported by substantial capacities in concentrate and pellet production. These assets provide a strong foundation for moving toward a more integrated and complete steel value chain in the region.

With concentrate and pellet production infrastructure already in place, Sangan steel company is now at a point where developing the next stage of the value chain—namely, the construction of a direct reduced iron (DRI) plant—could represent a strategic and economically significant step.

Converting pellets into DRI means moving beyond the production and sale of an intermediate product toward a higher-value product. Such a move could improve the profitability and efficiency of existing investments while further transforming Sangan’s proximity to iron ore resources and processing facilities into a tangible economic advantage.

When the raw material, concentrate and pellets are all produced within the same region, expanding DRI capacity can create a more integrated and economically efficient production chain. It can also help retain a greater share of the value generated by the steel industry within the region rather than allowing part of that value to flow elsewhere.

Beyond Production: A Driver of Regional Industrial Development

The significance of completing the steel value chain in Sangan extends beyond Sangan steel company itself.

A more integrated steel chain could become one of the drivers of industrial development in eastern Iran, creating new employment opportunities, stimulating downstream industries, supporting infrastructure development and attracting additional investment to the region.

Sangan has the potential to evolve from a major mining and raw-material production hub into a more comprehensive center within Iran’s steel value chain—one in which mining, mineral processing and downstream steelmaking stages are more closely integrated.

Such integration can also strengthen the economic rationale for investment in infrastructure, logistics, energy and industrial services, while creating a stronger ecosystem around the region’s mining and steel activities.

A Forward-Looking Approach to the Steel Value Chain

In recent months, Ali Rasoulian, CEO of Sangan steel company, has emphasized the importance of maximizing the potential of the Sangan region and completing the steel production chain in eastern Iran, particularly in Razavi Khorasan Province.

This approach goes beyond simply increasing the volume or quality of individual products. It reflects a forward-looking and practical perspective on sustainable industrial development—one based on leveraging existing resources, infrastructure and production capacities to create greater value across the entire chain. From this perspective, developing DRI capacity in Sangan could be viewed not merely as another industrial project, but as part of a broader strategy to enhance the economic integration of the region’s mining and steel assets.

The combination of substantial iron ore resources, concentrate and pellet production capacity, and large-scale industrial infrastructure provides Sangan with a distinctive foundation for further downstream development.

Why Should the DRI Link Remain Outside the Chain?

The central question is therefore straightforward:

When Sangan already has the mines, concentrate production, pelletizing capacity and major industrial infrastructure, why should the DRI link not also be completed in the same region? Completing this missing link could help transform Sangan’s existing mining and mineral-processing advantages into a more integrated steel value chain, strengthening regional value creation and supporting the long-term development of eastern Iran’s industrial economy.