China’s CITIC Group Corporation has expressed readiness to provide Iran with $10 billion of financing, mostly in the mining sector, announced a top official with the Chinese company.
Zhou Yafang was speaking during a meeting with Mehdi Karbasian, the head of Iranian Mines and Mining Industries Development and Renovation Organization, at IMIDRO’s headquarters in Tehran on Monday.
The Chinese government is expected to issue the required permits by the end of this year and the financing process will start in 2017, the Chinese official was quoted as saying by IMIDRO’s news portal.
Zhou added that the financing is fully backed by China Export and Credit Insurance Corporation known as Sinosure.
Sinosure is a major state-owned enterprise that offers export credit insurance, in particular coverage for the export of high-value added goods in China. It also offers coverage against political, commercial and credit risks. This includes short-, medium- and long-term export credit insurance, investment insurance, bond and guarantee business, debt and capital retrieval business and credit assessment business.
Zhou called on IMIDRO to provide CITIC Group with a list of its prioritized mining projects and expressed his company’s interest in Iran’s steel, coal, copper and aluminum sectors.
Karbasian, who is also deputy minister of industries, mining and trade, said $2 billion worth of mining projects are underway in steel, copper and aluminum plants alongside the Persian Gulf, coal projects in central Iran, in addition to the development of Pars Special Economic Energy Zone.
IMIDRO is firm on absorbing investment to the mining sector so that it can increase annual production capacity of steel, aluminum and copper cathode from the current 24 million, 460,000 and 255,000 tons to 55 million, 1.5 million and 800,000 tons respectively by the end of the 20-Year National Vision Plan (2005-25).
The Iranian Mines and Mining Industries Development and Renovation Organization estimated in its annual general meeting held on Saturday that Iran’s mining sector requires $15.3 billion in foreign direct investment to meet the goals stipulated in the sixth five-year development plan (2016-21).
Development plans are laws drafted by the government and ratified by parliament every five years since 1991 and are meant to provide the broad directions for a wide range of economic reforms and social priorities.
The Beijing-based CITIC Group Corporation, formerly the China International Trust and Investment Corporation, is a state-owned investment company established in 1979. Its initial aim was to “attract and utilize foreign capital, introduce advanced technologies and adopt advanced and scientific international practice in operation and management”, according to its website.
It now owns 44 subsidiaries, including China CITIC Bank, CITIC Holding, CITIC Trust Co. and CITIC Merchant Co. Ltd in China, Hong Kong, the United States, Canada, Australia and New Zealand. As one of China’s largest holdings, the value of CITIC Group’s assets reach up to $200 billion. The group provided Chinese companies with $100 billion of loans in 2015.
