The government has concentrated much efforts on attracting private investments in the mining sector, even as a large number of foreign investors have shown interest in domestic mineral industries since a framework nuclear agreement was reached between Iran and the P5+1 (the five permanent members of the UN Security Council plus Germany) on April 2.
Multinational mining companies, many from Europe and America, have held negotiations with officials from the Iranian Mines and Mining Industries Development and Renovation Organization–Iran’s major state-owned holding company active in the mining sector–waiting for an official end of sanctions before starting joint mining operations with Iran, Eghtesad-News reported.
According to IMIDRO officials, foreign mining companies are more eager to enter joint projects in the mineral processing industries rather than in mineral exploration and extraction, as they are seeking higher value added in processing minerals.
Special IMIDRO Committee
Faced with a large number of foreign proposals, IMIDRO recently formed a special committee to introduce investment opportunities in Iran’s mining sector and handle negotiations with foreign investors, according to IMIDRO head Mehdi Karbasian.
Vast reserves of both metallic and non-metallic minerals, along with availability of cheap energy, a strong network of road and railroad transport and educated labor force, are seen as major attractions of investing in Iran’s mining sector.
The giant mining companies’ optimism about the future of Iran’s mining sector is supported by official data that indicate investments by private companies and individuals in the mining sector have constantly increased since President Hassan Rouhani’s administration came to office in August 2013.
Private Sector Holds Lion’s Share of Investment
Based on data provided by the Statistical Center of Iran, approximately 13 trillion rials ($394 million at market exchange rate) were invested in 5,445 operational mines across the country during the Iranian year 1392 (ended March 20, 2014). Of the total investments in the sector, 65.6% or $258 million were made by the private sector, while the government accounted for the remaining 34.4%.
Industries receiving maximum investments during the period included iron ore, copper and decorative stones respectively. Also, over 10 trillion rials (about $300 million) were invested during the year toward the purchase of machinery and equipment.
While no official statistics have yet been announced on mining operations in the Iranian year (ended March 20), vast exploration operations carried out by IMIDRO in collaboration with the Ministry of Industries, Mines and Trade and the Geological Survey of Iran on 200,000 square kilometers of the country’s eastern regions over the past 18 months have led to the discovery of vast mineral deposits, including 250 million tons of iron ore reserves, 200 million tons of coal and 30 tons of gold.
As mineral explorations are expected to continue and expand to the western regions, the ministry last month predicted a growth of between 40% and 50% in volume and value of the country’s proven mineral reserves respectively in the current Iranian year.
