Steel industry shrinks amid dwindling sales

KABUL: Afghanistan Industries Union says steel industry has been declining after government stopped sales of scrap metal to steel factories.

Afghanistan has dozens of steel mills, but the government has stopped selling state-owned iron ore to these plants and now it is being smuggled to neighboring countries, especially Pakistan.

Ahmad Peyman, president of Afghanistan Industries Union, said the government has stopped selling metal to steel factories which has put them in a bind. He called on the government to resume its sales so that factories can continue producing metal products as they face a scarcity of raw materials.

“Afghanistan had 50 private steel mills, but now they are down to 10,” he said, adding that production levels have also shrunk 30 percent.

Khan Steel, Mihan, Meysam, Foolad, Javid Afghan and some other steel mills annually produce hundreds of tons of metal products. This is as much of Afghanistan’s scrap metal is smuggled to Pakistan through Torkham Pass.

Mr. Peyman stated that about 900,000 tons of iron is imported from abroad, and if the conditions allow for better iron production in Afghanistan, these factories can produce 700,000 to 800,000 tons of iron annually and reduce the level of imports.

On the other hand, the Ministry of Finance says the sale of government mortars to steel factories has temporarily stopped and the government is looking for a new solution for the sale of mortars.

“According to the president’s decree, a new strategy will be developed to prevent corruption in this regard and resolve this issue. We have devised a plan to prevent smuggling of iron,” it said in a statement.