Iran’s aluminium production soars to 560,000 tonnes despite power crisis

Iran produces approximately 560,000 tonnes of aluminium ingots annually, and it does not fully utilise more than 650,000 tonnes of installed capacity, Houshang Goodarzi, head of the Iranian Aluminium Industries Syndicate, reported due to a consistent lack of electricity and natural gas supplies.

Goodarzi explained that the aluminium chain begins with alumina production at the Jajarm complex and flows through four key smelters. “Iran requires about 1.3 million tonnes of alumina to meet its full ingot production capacity. Domestic supply provides only 250,000 tonnes, with the remainder imported, often under foreign exchange constraints. For every kilogram of aluminium ingot, roughly twice as much alumina powder is needed,” he said.

Although about 450,000 tonnes could serve domestic demand, only 300,000 tonnes typically reach local industries, as exports are used to finance costly alumina imports. Downstream sectors such as foil, automotive parts, and cables are struggling. Goodarzi noted, “The upstream sector continues production according to plan and supplies materials, but consumption is down, and in recent weeks much of the inventory in the commodities exchange has gone unsold.”

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Strong output, slight dip

Despite these obstacles, Iran's aluminium sector continues to be a major player in the region. According to the Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO), the four largest participants in the country – South Aluminium (SALCO), Iralco, Almahdi, and Iran Alumina – provided 552,185 tonnes in the first 11 months of the current Iranian year (March 2024 to February 2025).

This represents a 5.16 per cent decrease from 582,200 tonnes the previous year. Smelters produced the following: SALCO (222,397 tonnes), Iralco (160,237 tonnes), Almahdi (138,915 tonnes), and Iran Alumina (30,636 tonnes). Alumina production showed its own slight growth in both powder and hydrate proportions, and bauxite production increased by 35 per cent.

Overall, the Iranian aluminium industry remains resilient, with increasing production of bauxite and alumina ensuring smelters were performing steadily. However, it continues to face ongoing periods of energy shortage and a lack of finances to fully expand its capacity. Goodarzi is cautiously optimistic that power shortages may ease later in the summer, but winter gas limitations could result in additional complications.