The minister further said at a ceremony to inaugurate a steel project in the western city of Malayer that the national demand for steel stands at 15-16 million tons a year, adding that demand for the strategic product is growing.

“If steel production does not grow fast, we would turn into the largest steel importer in the Middle East in the next few years,“ he said, adding that some 20 private companies have invested in the steel rolling sector, IRNA reported.

He said grounds must be prepared for private firms to invest in the steel industry.

Iran has given top priority to developing cement and steel sectors.

Earlier this month, Tahmasbi said that Isfahan’s Mobarakeh Steel Mills has become the world’s largest producer of sponge iron.

The minister said at the opening ceremony of the giant steel complex’s seven development projects that ’once these projects become operational, Mobarakeh Steel Mills’ total production will increase from 5.2 million tons to seven million tons a year’.

He said the national steel industry is seriously following up plans to increase overall production capacity to 29 million tons a year by end of the Fourth Plan (2005-2010).

Tahmasbi further said that aluminum and copper production capacities are also expected to rise by 700,000 and 500,000 tons respectively a year by 2010.

He said the country will also increase its iron ore extraction to 50 million tons a year in the near future.

The minister said some $13 billion has been invested in the project to develop Mobarakeh Steel Mills, adding that if adequate investments are not made in the steel industry, the country will have to import 10-12 million tons of steel per annum in 2010.

Iran needs to import an extra six million tons of iron by late March, iron dealers say, stressing that failure to do this would lead to the creation of a black market and a steep price hike.