Industry

Digging Deeper

Mining

Iran's mining industry has long been arrested due to sanctions. Now that the sanctions era is over, the country is looking for foreign investment to rapidly develop its mineral and mining sector, whose wealth might be greater than the oil and gas sector.

With some of the world’s largest reserves, Iran is often touted for its vast oil and gas wealth, and much of the country’s industry has long been focused on developing the sector. The spotlight on the petroleum industry has taken attention away from Iran’s mining sector, which draws from one of the most mineral rich areas in the region. Iran’s mineral wealth allows it to lay claim to the world’s largest zinc reserves, more than 200 iron ore deposits, 75% of the total production of copper in the Middle East, and the largest gold deposits in the region. It may be through mining, rather than oil and gas, that Iran is able to return to prosperity following the end of sanctions.

According to the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), the country witnessed a massive 23% increase in exports in the first five months of the current Iranian calendar year, from March 20-August 21, when compared YoY; that 23% increase brought Iranian minerals and mining exports to USD2.9 billion, up from USD2.3 billion during the same time the previous year. The Ministry of Industry, Mines and Trade announced in June that mining and mineral products represented 16.5%, valued at USD7 billion, of Iran’s non-oil exports for the previous Iranian calendar year, which ended on March 19, 2016. The value of the Iranian mining industry is largely dominated by the state. Approximately 90% of the country’s total mines and related industries are controlled by the government, which is currently seeking additional funding to further develop the sector. Some 30 companies, most of which are controlled by the state, manage all other companies and mining activities in the country. If not entirely owned, the state holds a majority share in companies that are set up as partially nationalized or as joint stock companies.

With the end of sanctions, the government is looking to significantly bolster its mining sector. In an exclusive interview with TBY, HE Mohammad Reza Nematzadeh, the Minister of Industry, Mine and Trade, said the government in 2015 invested some USD3 billion in steel facilities, despite still being under sanctions. Now, Iran is looking to open USD29 billion in mining progress, and is hoping to attract the foreign investors it has access to in the post-sanctions era. According to Nematzadeh, the country currently produces at minimum 18 million tons of steel per year, but the industry is working to increase minimum output of steel to 50 million tons by 2025, 10 million tons of which will be destined for export.

IMIDRO states Iran has exactly 2.6 billion tons of copper, accounting for 4% of the world’s total reserves. The copper is located in a belt that spans from the country’s northwest to the southeast, and, in 2013, total production of copper cathode amounted to 188,000 tons. Research by Hannam and Partners, a UK-based financial consultancy firm, suggests that Iran sits on the world’s largest copper belt and that the metal is the second most-profitable in the country’s mining industry. Iran’s 19 active copper mines extract approximately 15 million tons per annum, with the largest mines being Sarcheshmeh, located in the southern part of the country with proven reserves equating to 826.5 million tons and annual production of 1.4 million tons; Songood, located in the northeast near the border with Armenia and with proven reserves of 440 million tons and an annual production rate of 7 million tons; and Meidouk, located just east of Sarcheshmeh and with proven reserves of 83.83 million tons and an annual output of 5 million tons, according to Hannam and Partners. According to Ahmad Moradalizadeh, the CEO of the National Iranian Copper Industries Company (NICICO), the copper industry represents 4% of GDP, and Iran lays claim to the largest share of global production, at 1.2%, producing 25 million tons per year.

Local production is dominated by NICICO. The state-owned company is involved in all aspects of the industry, from exploration and extraction to production and distribution. In addition, NICICO is also the prime entity for attracting and securing investments for all copper-related activities in Iran and also oversees all commercial financial, industrial, and mining operations for all Iranian projects, both within the country and abroad. According to Hannam and Partners, NICICO is among the top companies listed on the Iranian stock exchange; with exports reaching USD1.3 billion in 2010, the company is the country’s largest exporter of non-petroleum products.

Iran sits on top of the region’s largest deposits of gold, and the government has earmarked the metal as a priority for exploration, with plans to increase production from 100,000oz per year to more than 320,000oz per year by 2017, according to Hannam and Partners. Iran has an estimated reserve of 12 million ounces and has at minimum 14 gold deposits throughout the country. Of the country’s 24 gold mines, 15 are currently in operation. Some of the largest sites in use currently are Zareh Shuran, with probable reserves of 3.5 million ounces; Dashkasan, with probable reserves of 2.2 million ounces; and Kharvana and Agh Dare, each with probable reserves of 1.1 million ounces.

The world’s largest reserves of zinc are found in Iran, which is primarily extracted from two significant mines: the Mahdi-Abad mine, in central Iran, stores some 75 million tons of ore, of which 6% is estimated to be zinc; and the Angouran mine, located in Iran’s northwest, which has 16 million tons of ore, of which 26% is purported to be zinc. In total, some 11 million tons of zinc is spread throughout the country, with the nation’s largest producer being the Iran Zinc Mines Development Group.

Iran has an estimated 4.5 billion tons of iron ore in its soil, equaling to roughly 3% of the world’s total reserves. In 2013, the Islamic Republic was the 10th largest producer of the ore in the world, having produced 34 million tons, a 2 million ton increase from the previous year. Production increased another 11 million tons in 2014, bringing the country to ninth in terms of ore production, and 14th for steel. There are estimated to be more than 200 ore deposits throughout the country, and despite its possession of 3% of the worlds ore, Iran only accounts for 1% of global total production.

You may also be interested in...

Transport

4 Maritime Bottlenecks

Logistics Chokepoints of Global Trade

View More

Tourism

Taste of Cherry

Iran’s Film Industry

View More

Diplomacy

Iran Sanctions Return

US Pressure Affects Trade

View More

Finance

Iran’s Cautious Growth

Capital Markets Trading On

View More
Nuts & Bolts

Economy

Nuts & Bolts

Doing Business

View More
20 by 2025

Tourism

20 by 2025

International Tourism

View More
Reforms Under Fire

Health & Education

Reforms Under Fire

Women in Education

View More
Back to School

Health & Education

Back to School

Education

View More
Won’t You Take Me to… Barkat Town

Health & Education

Won’t You Take Me to… Barkat Town

Pharmaceuticals

View More
View All Articles