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Iron ore-wheat barter deal prospects: PSM team heads to Tehran tomorrow




  • A four-member delegation of Pakistan Steel Mills (PSM) is proceeding to Tehran via Dubai on December 22 to explore avenues of barter trade, ie, iron ore in lieu of wheat as federal government has given its concurrence, well-informed sources told Business Recorder. 

    The Board of Directors of PSM was informed on December 5, 2012 that for the last 10 days of October 2012, the Capacity Utilisation (CAPU) had declined to 8 per cent as there was no coal after five months and twenty days. PSM was operating on 12-14 per cent CAPU which was reduced due to non availability of coal. The delegation will include two board members, Engineer Jabbar Memon who is also chairman of price committee, and Syed Nayyar Hussain Haidar, CEO PSM, Major General Muhammad Javed (retired) and General Manager Bulk Material Department Shamsi Hasan. 

    The committee is empowered to negotiate, procure as well as fix suitable price in addition to finalising freight arrangement and payment mechanism, the sources added. According to Pakistan embassy in Tehran the delegation will hold meetings with the Iranian companies on December 23 and 24 in Tehran. 

    Pakistan embassy in Tehran has refused to fund the official delegation saying that embassy receives funds from Dubai which are barely sufficient to meet its day to day operations. In case of high level delegations, the concerned departments transfer/ remit funds. Therefore the PSM delegation has to incur expenditure on hotel and transport from its own resources. 

    The sources said Secretary Production goes to Karachi almost every week on official visit to meet his family and is not part of the delegation. The delegation will meet with the top management of M/s Shadabe Yazd Industrial Company M/s ICIOC, M/s Imidro, M/s Ehya Sepahan Mining and Industries Complex Company and M/s Asre Poya Industry. 

    The agenda of the delegation will be as follows; (i) finding possibilities for barter trade (wheat /met.coke vs iron ore); (ii) payment mechanism; (iii) price mechanism, (iv) contract enhancement and finalisation of payment schedule or mechanism of Asre Poya and ICIOC which is $15.5 million, 10% amount left due to US sanctions for dollar transfers and some PS financial issues. Insiders’ claim that the delegation will return empty hand as PSM has no money to pay back $15.5 million to the Iranian company. 

    Copyright Business Recorder, 2012

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