Ever since Iran and the P5+1 group (the five permanent members of the United Nations Security Council plus Germany) reached an interim nuclear deal in Geneva back in 2013, foreign companies have established contacts with Tehran to invest in different sectors of the economy.
The mining sector has always been an attractive investment opportunity, next only to the lucrative oil and gas sector, considering the fact that the already discovered mines constitute only a small percentage of the real mineral reserves in the country. After the 1979 Islamic Revolution, a series of issues such as Iraq-Iran War, budget deficits and mismanagement, have hindered development in the mining sector.
But, under the new circumstances, many countries have expressed willingness to invest in Iran's mining sector. The United Arab Emirates is said to have shown interest to take part in Iran's copper, iron, and titanium mine exploration operations. This is while the government has neither the financial resources to fund such costly operations nor the technical capabilities. The Persian Gulf state, however, apparently has enough financial resources to bear the astronomical costs of exploration operations, while relying on the European and American companies in terms of technical know-how.
According to Mehdi Karbasian, the deputy minister of industry, mine, and trade and the chairman of board of directors at the Iranian Mines and Mining industries Development and Renovation Organization (IMIDRO), Iran's mining development is a golden opportunity for international financiers to invest as much as $9 billion in the sector. Karbasian's remarks during the 18th Middle East Iron and Steel Conference held in Dubai last December, highlighting the great mining opportunities in Iran, could have been the key reason behind the Arabs' interest to enter Iran's lucrative mining sector.
President Hassan Rouhani's administration has already started exploring 200,000 square kilometers of the country's soil, in line with the country's 2025 Vision Plan, which requires the steel sector to produce at least 55 million metric tons of crude steel by the next decade. The possible presence of investors such as the UAE and Oman in Iran's mining sector could accelerate such exploratory operations. Introducing state-of-the-art foreign technologies, thanks to the funds provided by rich Arab states, could also facilitate aerial surveys and mine explorations as deep as 1,000 meters across Iran.
