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Monday, November 07, 2011

Cincinnati's Pension Fund Invested In Firm Building Iran's Steel Industry: Ohio Divested, But City $$$$ Helped the Mullahs

Iran Tie In Pension Report
CINCINNATI (TDB) -- With Iran "very close" to having nuclear weapons -- and U.S, officials actively tightening a trade embargo on the mullah-controlled nation -- it now seems time for the City of Cincinnati's $2.13 billion pension fund to divest itself of all investments that involve the Islamic Republic. In fact, move is long overdue.  Ohio's pension funds for public employees have already taken such action.  Four years ago, OPERS cut investments to companies with ties to Iran and Sudan, both breeding grounds for international terrorism.  At the time, Ohio  leaders were worried about "management of potentially unique risks posed by certain public stock and bond investments in companies with ties to Iran and Sudan."   State Treasurer Josh Mandel, then a Republican state rep from suburban Cleveland, led the divestment push.  Cincinnati didn't follow the state's lead, and the books show it has invested in a Finnish company called Outukumpu, which manufactures stainless steel and other products for making metals.  The city's investment is small and is a minor chunk of its international and emerging market portfolio.  But there should be no room at all for companies doing business with Iran.

The Daily Bellwether found a couple of news releases from Outokumpu about some of its Irananian activities:  "Outokumpu Technology has been awarded a contract by Gol-E-Gohar Iron Ore Company for a new pelletizing plant to be built in Gol-E-Gohar in the province of Kerman, the Islamic Republic of Iran. The total value of the project is about EUR 140 million, of which Outokumpu’s scope of technology supply is about EUR 50 million. . .
Gol-E-Gohar Iron Ore Company operates the biggest iron ore mine in Iran. The new pelletizing plant, once operational, will produce 4 000 000 tonnes of direct reduction quality iron pellets per year. Besides the two plants in Ahwaz and the plant in Mobarakeh near Esfahan, it will be the fourth Iranian pelletizing plant featuring a Lurgi traveling grate system. Outokumpu Technology with the acquisition of former Lurgi Metallurgie GmbH is the market leader for pelletizing technologies for the ferrous and ferroalloys industries. Outokumpu’s pelletizing technology was selected due to its capability to process a wide range of iron ores, including the magnetites of the Gol-E-Gohar deposit, which are specifically rich in sulphur. The Gol-E-Gohar pelletizing plant is already the second major technology delivery of Outokumpu to Iran announced this year. In June, Outokumpu’s technology was chosen for the largest zinc plant of Iran."  And this:  Outokumpu’s technology for the largest zinc plant in the Islamic Republic of Iran.  Outokumpu Technology will design and supply technology for a 100,000 t/y zinc plant for Iran Zinc Production Company in cooperation with Kahanroba (Iran), ABB (Switzerland) and TAIM (Spain).  The cooperation group will deliver the new plant on a turnkey basis. The total contract value is approximately 200 million euros, of which Outokumpu’s share is some 40 million.  Outokumpu Technology’s scope covers the process technology, proprietary equipment, engineering and project services.  The new plant will use Outokumpu’s modern Direct Leaching technology and it will be built near Anguran zinc and lead mine in the northwest province of Zanjan. When operational the plant will be the largest zinc plant in Iran and increase the zinc production capacity of the country by 75 per cent." 

It's not like the city will really suffer by avoiding Iranian investments.  The 2nd quarter pension fund statement shows the Outkumpu holding had a 23.6% negative return -- almost as bad a putting money in an Italian bank during the Eurozone financial crisis. There's a national movement seeking divestment from Iran, and you can learn about its efforts by clicking here.

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