With the lifting of sanctions against Iran on Jan. 16, as part of the July 14 nuclear accord reached with the six major world powers, the country has entered a new economic era.
Iran is taking measures to tackle a long-running recession and drive the economy toward growth, mainly through attracting foreign investments.
“Foreign investments are in fact going to oil the wheels of our emerging economy,” says Seyyed Hossein Salimi, chairman of Iranian and Foreign Joint Venture Investment Association, affiliated to Iran Chamber of Commerce, Industries, Mines and Agriculture.
Salimi mentioned President Hassan Rouhani’s recent visit to Italy and France, as well as the many investment and cooperation deals signed with European companies.
The deals included Iran Khodro’s $435 million deal with the French automaker Peugeot Citroën and Italian Danieli Group’s $6.2 billion accord with the Iranian Mines and Mining Industries Development and Renovation Organization in the mining and steel sectors.
According to the official, the deals signed with the European companies will pave the way for other countries such as South Korea and Japan to invest in alternative sectors in Iran, as they have already expressed interest in cashing in on the country’s untapped and populous market. Salimi believes that the total value of foreign investments in Iran is expected to reach $30 billion in the next five months, as more trade delegations flock to the country.
According to President Rouhani, Iran needs foreign investments of $30 billion to $50 billion to achieve its 8% annual growth target.
In an interview with the Persian daily Forsat-e Emrooz, Salimi elaborated on some of Iran's investment priorities in the post-sanctions era.
> Untapped Opportunities
"Iranian mines, boasting some 68 types of minerals, with more than 37 million tons of proven reserves and 57 billion tons of potential reserves, are arguably the country’s most sought-after, yet untapped sector for investment," Salimi said.
According to USGS, Iran holds the world’s largest zinc, 9th largest copper, 12th largest iron ore and 10th largest uranium reserves. Overall, Iran is home to more than 7% of global mineral reserves.
Salimi noted that both Italian and Australian companies, which are global leaders in the industry, are currently vying to invest in Iran's mining industry, especially the steel sector.
Deputy Minister of Industries, Mining and Trade Mehdi Karbasian, recently announced that British-Australian Rio Tinto Group is considering to return to Iran after a 15-year hiatus.
The company, founded in 1873, is among the world leaders in production of aluminum, iron ore, copper, uranium, coal and diamonds, and currently operates on six continents.
> Need for Marketing
Salimi said industrial sectors such as cement, tiles and ceramics are grappling with shortages in domestic demand and lack the marketing ability to sell their commodities overseas.
"Consequently, they no longer require investments to go toward setting up new plants and expanding production," he said.
“Iranian cement, tiles and ceramics, as well as cosmetics are of superb quality, offered at competitive prices.”
The Iranian official added that the country “produces more than 70 million tons of cement per year, while the domestic annual consumption of this commodity is about 30 million tons".
Salimi noted that foreign investors and large global distribution companies with robust international connections and marketing expertise can cooperate with Iran by purchasing the surplus and exporting it overseas. He added that the process can be highly beneficial for both parties.
Foreign investors can earn huge profits by offering high-quality, low-priced Iranian goods in new markets, while the Iranian companies will benefit in the long run, as the quality of the goods will spark international interest and result in further foreign investments in production.
