The average Producer Price Index for the mining sector in the four-quarter period ending Sept. 22, which marks the end of the second quarter of the current fiscal year, increased by 116.1% compared with the same period of the year before.
According to the latest data released by the Statistical Center of Iran, the sector’s average PPI for the four-quarter period to June 21, i.e., the end of Q1 of current Iranian year, had increased by 154.1% year-on-year.
The average annual producer inflation of the “coal extraction” subsector in Q1 was at 102% and those of “extraction of metal ores” and “extraction of other mines” subsectors were at 123.3% and 67.4%, respectively.
The overall PPI of mining sector (using the Iranian year ending March 2017 as the new base year) stood at 1,018.2 in Q2, indicating a 10.1% increase compared with the previous quarter and a 101.6% growth over the same quarter of last year.
The quarter-on-quarter producer inflation of the “coal extraction” subsector was at 9.4% in Q2 and those of the “extraction of metal ores” and “extraction of other mines” subsectors reached 10.2% and 8.7%, respectively.
The year-on-year producer inflation of the “coal extraction” subsector was 89.6% and those of the “extraction of metal ores” and “extraction of other mines” subsectors were 105.8% and 68.6%, respectively.
Iran’s Mineral Landscape
Iran is home to 81 types of minerals with reserves totaling 37-40 billion tons, according to Alireza Shahidi, the head of Geological Survey and Mineral Exploration of Iran.
“Construction materials, including gravel, rubble stones, sand and different types of stones, account for 62% of Iran’s mineral reserves, metallic minerals constitute 10-15% of total reserves and the rest are non-metallic minerals,” he was quoted as saying by IRNA.
“Gold reserves are increasing on a daily basis. Recently, new mines have been identified; in South Khorasan Province, for example, the reserves of which, we hope, should help increase the country’s mineral wealth to 100 billion tons.”
Up until 2015, the level of exploration and investment was in tandem, now a wide gap has opened up between the two, suggesting that the costs of exploration are on the rise.
Shahidi noted that a total of 945,000 kilometers of land in Iran underwent exploration operations in the 2000s.
“The country’s mines are mostly close to the surface; [exploitation of] hidden mineral reserves in the depths of the earth need to increase,” he said.
According to the United States Geological Survey, Iran holds the world's largest zinc, ninth largest copper, 10th largest iron ore, fifth largest gypsum and barite, and 10th largest uranium reserves.
Overall, Iran is home to more than 7% of global mineral reserves.
Since the beginning of the current fiscal 2021-22 [started March 21], a total of 196 mines have been activated, Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO)’s news portal reported on Aug. 10.
Iran Minerals Production and Supply Company is the IMIDRO body responsible for the revival of inactive mines.
Data collected from Feb. 19 to May 1 by the Statistical Center of Iran in the fiscal 2021-22 show out of 10,170 mines in Iran, 6,861 were active and 3,309 were inactive.
From the 6,861 active mines, 6,449 mines were operational, 289 mines were involved in operations and explorations, and 123 were operational while they were being equipped.
From the 3,309 inactive mines, 289 were only being equipped, 60 mines had less than 30 days of operations, 513 mines had been permanently closed, 208 were temporarily closed and 430 had other reasons for their inactivity.
Some other causes for the inactivity of mines such as mine blockage, market stagnation, lack of licenses and legal and environmental problems were the most common.
Mineral Trade
Iran’s export of mineral products reached 55 million tons worth $7.6 billion in the last fiscal year (ended March 2021) to register a 21% and 11% year-on-year decline in total volume and value respectively.
According to IMIDRO, steel topped the list of exports in terms of value with $4.1 billion and was followed by copper with $958 million and cement with $758 million.
In terms of tonnage, cement had the largest share with 24.3 million tons, followed by steel with 9.69 million tons.
Alumina powder exports saw the biggest jump in terms of value (335% YOY) to reach $1.8 million, followed by aluminum products with $321 million (up 177% YOY).
Imports stood at 4.15 million tons worth $3.4 billion in the fiscal 2020-21, indicating a 13% increase in tonnage and a 6% growth in value compared with the year before.
Steel also topped the list of mineral imports in terms of value with $1.3 billion, followed by coal and coke with $300 million. Aluminum products with $290 million came next.
The value of steel imports saw the biggest jump (39% YOY) to $1.37 million.
According to IMIDRO, the aggregate sales volume of 74 heavyweight Tehran Stock Exchange-listed mining and mineral companies stood at 3.22 quadrillion rials ($11.7 billion) in the last Iranian year to register a 105% rise compared to the year before.
Mobarakeh Steel Company registered the highest sales volume among the firms during the period with 774.6 trillion rials ($2.8 billion), up 98% year-on-year.
MSC is the biggest steelmaker in Iran and the Middle East and North Africa region, accounting for about half of the country's steel production. It was followed by the Iranian National Copper Industries Company with 419.4 trillion rials ($1.52 billion) of sales during the year, up by 87% YOY.
NICICO is a leading copper producer in the MENA region and its mines hold close to 14% of Asia’s copper deposits and about 3% of global reserves.
Khuzestan Steel Company came third, as its sales totaled 306.4 trillion rials ($1.11 billion), up 93% YOY.
The steelmaker, located in the southwestern Khuzestan Province, is the biggest exporter of steel in Iran.
Iran is the world’s 10th biggest steelmaker.
