Economy, Business And Markets

Mines More Profitable Than Crude Oil

Mines More Profitable Than Crude OilMines More Profitable Than Crude Oil

Iran, OPEC’s fifth-largest crude oil producer, has potential to generate more revenue from mining than it does from crude if the government puts more focus on developing the metals sector, said first deputy minister in charge of trade at Iran’s Ministry of Industries, Mining and Trade.

Metals such as copper and lead, and higher-priced rare earth elements could be worth “much more” than the nation’s oil industry revenue of about $30 billion, assuming crude at $40 a barrel and exports of 2 million barrels a day, Mojtaba Khosrowtaj said in an interview, Bloomberg reported.

Iran is opening $185 billion of energy projects and $29 billion of mining deals to investors once western sanctions are lifted.

The country has more than 3,000 active mines, mostly privately owned, according to the US Geological Survey. The sector is still using equipment developed 15 or 20 years ago because of lack of funds due to sanctions, Khosrowtaj said.

“We could use new technologies,” he said. “Expansion of construction projects in oil and gas or mining is reliant on banks and insurance companies, and sanctions have delayed them.”

Iran produced 2.7 million barrels a day in October, behind Saudi Arabia, Iraq, the UAE and Kuwait, according to data compiled by Bloomberg.

For metals in the region, Iran is the largest producer of iron ore, crude steel, manganese, lead, cement gypsum and copper, according to USGS data.

Khosrowtaj said domestic and foreign companies need to be encouraged to develop the mining sector.

“The Iran of the future is one where mining can gradually start replacing oil. We have asked potential investors to pay attention to the mining sector,” he said.

“Some 37 billion tons of minerals valued at $700 billion were discovered in Iran from exploration work at 50 meters underground. Reserves may be greater, if exploration work is done deeper in the ground and on a larger scale.”

According to Industries, Mining and Trade Organization of Ardabil Province, exploration of three major mineral-rich zones in the northwestern Iranian province are in the final stages.

One of the zones has 207 square kilometers of probable reserves and is set for further operations, Mehr News Agency reported.

Contractors have also found 331 square kilometers of probable reserves in another zone spanning 1,700 square kilometers.

The end of sanctions would lead to the unfreezing of assets worth at least $30 billion, access to international finance and foreign direct investment, higher energy exports and the chance to import more modern industrial technology. About a dozen European trade delegations have visited Iran since the nuclear pact was signed in July, including groups from France, Germany and Italy.

“With the lifting of sanctions, there will be new opportunities that will accelerate growth,” he said.

  Mining Cooperation With Niger

Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh and Niger’s Minister of Mines and Industrial Development Omar Hamidou Tchiana, in a meeting in Tehran on Sunday, called for expansion of mining cooperation.

The two sides discussed cooperation in exploration of gold and copper, exchange of equipment and technological knowhow, and promotion of investments in the sector, IRNA reported.

The mining industry is a crucial piece of Niger’s economy. Exports of minerals consistently account for 40% of exports.

Mineral commodities produced in Niger included cement, coal, gold, gypsum, limestone, salt, silver, tin and uranium.