Economy, Business And Markets

Ireland-Based Firm to Invest in 2 Iranian Mines

Ireland-Based Firm  to Invest in 2 Iranian Mines
Ireland-Based Firm  to Invest in 2 Iranian Mines

Private finance company, Middle East Finance, officially based in Ireland, says it has signed agreements with the Iran’s Ministry of Industries, Mining and Trade in Tehran to invest, own and operate two copper mine projects with large reserves in northeast Iran.

MEF’s managing director based in London, Mehrdad Bolourchi, a PhD graduate and a chartered engineer with over 30 years of experience, told Mining Journal: "We shall be tendering for three international mining contractors and consultants outside Iran, and three local contractors and consultants in Iran so as to assist the international contractors in Iran with the local planning issues and logistics."

"We shall be signing the exploration license, which shall give MEF ownership and the right to mine for 25 years, which shall be renewable for further 25 years, when we sign the main contract with the Ministry of Industries, Mining and Trade.

"Our predicted investment shall be approximately $3 billion per mine project."

MEF attended an Iran government event in Geneva in mid-2015, which invited European companies to invest in the country as the easing of sanctions was being signaled.

“From that meeting, we were encouraged to go to Tehran and follow it up. We then had various meetings with the Ministry of Industries, Mining and Trade in Tehran commencing August 2015 and expressed MEF’s interest to invest, own and operate copper mines,” said Bolourchi.

He adds that the Industries Ministry was extremely cooperative and the funding obligations required have been secured by MEF and will be sourced from its own internal network in Europe and the Far East.

Work is expected to start in 2016 for the first mine, with first production targeted for 2019. Initially, work will focus on target areas within the 1,000 square km of the license area so as to ascertain the best location to commence excavation and production with the deepest concentration of the reserves. It is anticipated that the annual production of copper to be in excess of 250,000 tons.

According to Bolourchi, a significant amount of infrastructure is also required in the relatively rural area.

"We expect that the full agreements and the contracts will be signed within the next six months,” he said.

Iran’s copper reserves amount to 20 million tons, which is 2.9% of global reserves, according to the Iranian Mines and Mining Industries Development and Renovation Organization.  

Recent discoveries have promoted Iran to the 10th spot among countries with most copper reserves.

Chile owns by far the largest reserves, accounting for 27% globally and the equivalent of 190 million tons. Australia runs a far second with 87 million tons of copper reserves, followed by Peru, the US, Mexico, China and Poland. Iran shares the 10th place with Congo and Zambia.  

According to the latest statistics, more than 121 million tons of copper were extracted from Iran’s three largest copper mines, namely Sarcheshmeh, Sungun and Miduk, from March to December 2015, which is 664,000 tons less than the preceding year’s corresponding figure.

The decline in production comes against a backdrop of a 27% fall in global copper prices in 2015, which is expected to continue well into 2016.