Economy, Business And Markets

Aerial Geophysical Survey: Mining Sector’s Missing Piece

Aerial Geophysical Survey: Mining Sector’s Missing Piece
Aerial Geophysical Survey: Mining Sector’s Missing Piece

IranConMin is one of the industry’s leading trade fairs for international construction machinery, mining equipment and the building and natural stone industry. The IranConMin 2014 opened its gates again this year, despite the break it took in 2012 due to political and economic restrictions imposed on Iran over its nuclear energy activities.

The four-day event, which will end on October 20, presents market opportunities in Iran, considering the fact that many companies are modernizing their plants and machinery and realizing large-scale construction projects.

This year’s IranConMin is being held on an 11,000-square-meter venue in Tehran’s permanent fairground but it is expected to be held at a venue three times bigger in 2015, said Mohammad-Reza Bahraman, the head of Iran Mine House, an NGO that organizes IranConMin every year.

The mining sector is considered an advantage for the country and more planning is required for the sector which could even be a good alternative for the oil revenues, Bahraman told Financial Tribune.

IranConMin 2014 hosts some 95 foreign companies from countries such as Turkey, China, Germany, and Italy. Some of the foreign companies have attended the exhibition in the form of commercial delegations.

Foreign companies have come to this important conclusion that the economy is starting to grow fast in Iran and the political situation is changing in favor of Iran. By gradual easing of sanctions imposed on Iran during the past few years, foreign investors have come to know that absence in such an attractive market would have negative consequences for them, added Bahraman, stressing that the strong presence of foreigners proves that Iran’s economic atmosphere is totally positive in their opinion.

Iran Mine House believes that one of the serious challenges the country’s mining sector faces today is the lack of authentic and reliable data on geological specifications in different regions across Iran, as well as precise mine maps, Bahraman told Financial Tribune.

“As an NGO, we are determined to acquire such geological and topographic information and widely publicize it,” emphasized Bahraman.

Iran Mine House said it has already reached valuable agreements with the government regarding provision of information in mining sector. The NGO pledges that in next year’s IranConMin, much more valuable mining information will be provided for the experts.

The 60-billion-ton potential mineral reserve announced so far has been calculated based on very limited exploration operations and superficial information. Many countries across the world implement aerial exploration operations and detect the resources in the depth of between 1,000 and 1,500 meters. This is while the average exploration depth in the country does not exceed 150 meters, said Bahram Shakouri, member of the board at Iran Mine House.

Shakouri said very few countries have as many as 64 different kinds of mineral substances and Iran should take advantage of such variety and huge potential in its mining sector.

Shakouri reiterated that aerial mineral explorations and geophysical surveys are a must for future development of Iran mining industry, explaining that the entire African continent has been aerially surveyed and nowadays everyone knows what minerals there are.

An important factor experts identify for the missing aerial geophysical surveys and explorations is the presence of abundant resources of fossil fuels in the country namely oil and natural gas. During the decades, different governments in Iran have always relied on oil as the main source of revenue and such reliance has always distracted decision-makers from valuable and sustainable sources of national income like mines.

Another deterrent against extensive mining explorations is the expertise and technical know-how Iran lacks, for example to implement aerial geophysical surveys.

The budgets governments allocated during the decades were too tight and the private sector has not been that powerful to perform such costly and complicated operations, said Shakouri, adding that as much as $84 billion were spent across the world during the past decade for explorations, while the figure in Iran hardly hits $25 million.

The expert emphasized that if proper explorations began in the country, far more than 5 billion tons of iron and 7 billion tons of decorative stones would be discovered across the 1.64-million-square-meter country.

 Much to Discover

A great advantage Iran’s mining sector has over other countries is that many countries, particularly the developed ones, are running out of their mineral reserves, but due to lack of exploration operations in the past, Iran has much to discover. This gets more interesting when one notices other crucial advantages in Iran such as availability of abundant energy resources, educated labor force, suitable infrastructure for industrial and mining activities, and incentives offered by the government for foreign investors especially in free economic zones across the country.

Experts at Iran Mine House are hopeful that foreign companies help Iran implement widespread aerial geological surveys in order to provide a precise national map of the mines.

The German companies who have taken part in this year’s IranConMin are visiting the country with a commercial delegation headed by Messe Munchen International. The Munich-based international company’s executive director of capital goods shows, Wolf-Dietrich Muller, told Financial Tribune that there is very long history of partnership between Iranian and German companies and businesspeople.

Although fourteen German exhibitors is not considered to be a large delegation, it is a clear sign of what will hopefully happen in Germany-Iran trade ties in the coming year, said Muller.

The German manager said the Iranian economy offers many business possibilities for foreign partners.

Even if the German companies are not willing to directly invest in the mining sector, they can supply the Iranian mining firms with expertise and machinery, equipment, and raw material.

According to Muller, during the past few years many international companies have cut their business relationships with Iran over anti-Tehran sanctions, while the fourteen German companies from Munich, Frankfurt, and Hannover currently present at IranConMine 2014 have never cut their ties with their Iranian partners, but they have, in the worst-case scenario, halted business with the companies in the Islamic Republic.

“In the light of positive news which arose from Iran-West nuclear negotiations which took place in Geneva last year, and also from the regular bilateral and multilateral negotiations in Vienna and other cities, commercial companies and industrial groups both in Iran and Germany hope for the continuation of relationships in the very near future,” added Muller.

German companies at IranConMin 2014 have showcased high quality machinery and equipment which could help the country implement complicated exploration operations.