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Dashkesan’s ore-concentrating plant significantly reduced the volume of production and export of iron ore concentrate and iron ore in 2013. As Azerbaijani news agency Turan reports, this happened after the authorities of Azerbaijan annulled the contract with the British company.

According to the State Statistics Committee of Azerbaijan in 2013 the volume of iron ore production in the republic equaled to 141.4 thousand tons, 31.8% less than in 2012. Moreover, 38 thousand tons were not implemented by the end of the year.

In April of 2013 the government of Azerbaijan all of a sudden declared about the creation CJSC called “Azerbaijani Steel Production Complex” with the 100% state participation, thus annulling the contract with the company Det.Al Limited (The Great Britain) on the privatization of Dashkesan Filizsaflashdyrma OJSC (Dashkesan mining) from 2006.

As it is stated in the article, the analysis of the official figures of the production volume reveals that the company Det.Al Limitied invested into Dashkesan’s Company at least the part of promised $300 millions. Otherwise, the fourfold increase in the production of iron ore in 2011(214.3 thousand tons) would have been impossible. In 2012 the volume of production slightly decreased (207.3 thousand tons).

At the beginning of 2014 iron ore prices were just below $130 per ton, at the lowest level starting from the July of 2013. It’s noteworthy that the export prices of Azerbaijani non-agglomerated iron ore are much lower than the world prices. The reason of this may be the low concentration of iron and high transportation costs.

According to the State Customs Committee of Azerbaijan the exporting company declared $26.36 per ton in 2012. The data on the exports of 2013 is not known yet.

In 2012 from Azerbaijan 210.550 tons of iron ore was exported at total declared price of $ 5.55 million. The product was to be delivered to the Great Britain (169, 850.0 tons, $ 4.58 million), Hong Kong (27 350 tons, $ 738 million) and Georgia (13 350 tons, 227 thousand).

Currently the situation around Dashkesan Filizsaflashdyrma OJSC, 99.22% shares of which are controlled by the state represented by the State Committee on Property, remains unclear. Formally the state announced about the plans to design and construct the cycle of mining enterprises, to process and produce steel and finished products in the cities of Ganja and Dashkesan. This was reflected in the decree of the president of Azerbaijan on the 23rd of April 2013. However since then nothing has changed: there are no statutes, no structure and management of CJSC, even 2 million manat negligible capital of the company is not formed.

On the other hand, a private company, Baku Steel Company carries out parallel activities in this direction. In October of 2013 the company started the construction of integrated steel complex in the city of Ganja. In January of 2014 the president of Azerbaijan talked about the big plans for this year in the field of metallurgy but didn’t clarify any details.

As Turan notes the first agreement on the sale of shares of Dashkesan Filizsaflashdyrma OJSC, which controls the minefield of iron ore, the reserves of which are estimated at 350 million ton, took place in 2003. The British company Aldex Limited became the winner of the investment competition. It was committed to invest $50 million on the modernization of production. However, in 2005-2006 the contract was annulled under the pre-text of non –fulfillment of the contractual obligations.