Introduction
Downstream industries of copper, aluminum, and steel constitute the backbone of industrial development and value creation within resource-based economies. In Iran, despite significant reserves of these metals and strategic policies by the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), completing the value chains of these sectors- especially within Special Economic Zones (SEZs) like Kashan- has gained heightened importance. The Kashan SEZ, by attracting investments in downstream basic metal industries and fostering industrial clusters, plays a crucial role in achieving both national and regional goals.
Importance of the Value Chain in Downstream Industries
The value chain encompasses the series of processes that transform raw materials (e.g., concentrate or ingots) into higher-value finished products. These processes include the production of semi-finished goods (such as wire rods, sheets, and profiles), component manufacturing, industrial equipment production, consumer goods, and even advanced sectors like electronics and medical devices. Expanding the value chain not only increases employment and national revenue but also reduces raw material exports, enhances industrial complexity, and improves economic resilience.
The value chain for basic metals involves stages from extraction, refining, semi-finished goods production, component fabrication, to high value-added end products. In advanced economies, emphasis is placed on the final chain segments—particularly knowledge-based, export-oriented, and energy- and water-efficient industries—as a successful strategy.
Case Studies:
- Turkey’s Gebze Organized Industrial Zone (OSB) increased its downstream steel product export value fourfold over a decade by establishing specialized steel and component clusters.
- India’s Aditya Aluminum Special Economic Zone, supported by government and environmental policies, achieved full recycling of waste to produce end aluminum products.
Copper Value Chain: Opportunities and Challenges
Iran holds about 6% of the world’s copper reserves, with an annual cathode production capacity exceeding 300,000 tons, positioning it well to develop its downstream copper industries (1, 2). However, over 75% of the country’s copper industry currently focuses on low value-added products such as wire rod and copper cable, with only a small fraction dedicated to advanced, export-oriented products (2, 3). Recent experience shows the greatest value addition arises from special alloys, electronic components, medical equipment, and high-purity products.
Within Kashan SEZ, policies prioritize attracting downstream copper industries that consume minimal water, emit limited pollutants, and have direct links to the metallic industrial value chain. Examples include manufacturing electrical and electronic parts, industrial cables, connectors, automotive components, and precision equipment.
Aluminum Value Chain: Competitive Advantages and Development Path
Aluminum’s lightweight, corrosion resistance, and high recyclability drive its widespread use in transportation, construction, packaging, and renewable energy sectors. Iran, with major aluminum ingot and alloy producers, has a favorable environment for downstream development in profiles, sheets, automotive parts, power transmission equipment, and industrial enclosures. In Kashan SEZ, downstream aluminum industries focus on light components, electrical equipment, industrial structures, and corrosion-resistant products aligned with IMIDRO’s policies and environmental standards.
Steel Value Chain: From Ingots to Advanced Products
Steel is the most consumed industrial metal worldwide and a key driver of infrastructure development. In Iran, the steel value chain covers iron ore extraction to production of billets, sheets, and rebars, followed by downstream manufacturing of industrial parts, machinery, metal structures, and advanced industries such as automotive, home appliances, and medical equipment. Statistics show that steel and steel products comprised the largest share of Iran’s mining exports in 2023 (4). Nonetheless, completing the value chain with greater focus on technology-intensive and export-driven products remains a priority.
In Kashan SEZ, downstream steel industries prioritize production of machinery parts, industrial equipment, light metal structures, precision tools, and machine-building with optimized water and energy consumption and adherence to environmental requirements.
Role of Kashan Special Economic Zone in Value Chain Completion
Kashan SEZ provides dedicated specialized zones for downstream copper, aluminum, and steel industries, creating an enabling environment for manufacturing units, component making, machinery production, chemical industries, and industrial support services. The zone’s policies emphasize:
- Eliminating heavy and polluting processes (e.g., primary smelting and casting), focusing instead on downstream processing and assembly.
- Low water consumption and adoption of water recycling and treatment technologies.
- Adhering to maximum pollution grade 3 with continuous environmental monitoring.
- Supporting knowledge-based, export-oriented industries, and facilitating access to domestic and international markets.
- Offering integrated tax, customs, and logistics incentives.
Based on IMIDRO’s policies and the revised comprehensive plan, Kashan SEZ adopts a smart approach with key indicators including:
- Establishment of specialized downstream industrial clusters, with separate and focused value chains for copper, aluminum, and steel.
| Metal | Key Downstream Opportunities | Suggested Export Markets |
| Copper | Electronic components, power cables, medical equipment | CIS countries, Iraq, Turkey |
| Aluminum | Light industrial equipment, automotive parts, solar panels | India, Qatar, Oman |
| Steel | Machinery parts, light structures, machine-building | Syria, Afghanistan, East Africa |
- Digitalization of processes: inventory management systems, real-time environmental monitoring, production automation, and regional data management (SEZ IoT Monitoring).
- Stringent environmental policies focusing on low water consumption, online pollution tracking, industrial recycling, and wastewater reuse.
- Innovation support: designating areas for R&D industries and allocating space for knowledge-based companies active in engineering, high-tech, and advanced equipment manufacturing.
Vision
Developing the downstream value chains of copper, aluminum, and steel industries will not only increase value addition and employment in Iran but also position the country as a key regional player in basic metals markets. Kashan SEZ, through its intelligent approach and targeted policies under IMIDRO’s guidance, can serve as a successful model for downstream industry development and value chain completion.
To realize this vision, priority is given to investment in advanced technologies, production of high value-added and export-oriented products, and strengthening close collaborations with research and academic centers to enhance technical knowledge and innovate new products. The zone’s supportive policies and infrastructure will be continuously aligned with the evolving needs of downstream industries and global markets.
References
- Donya-e Sarmaye – Development of the Copper Industry Value Chain
- Donya-e-Eqtesad – Bottlenecks in Copper Value Chain Development
- Iran Copper Association – Value Addition in Copper Metals
- Iran Mining House – Steel Chain Export Statistics
