Economy, Business And Markets

German Firm to Help Extract Nepheline Syenite

German Firm to Help  Extract Nepheline Syenite
German Firm to Help  Extract Nepheline Syenite

T he Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) and a German company (Autotak) signed an agreement on Saturday based on which the German side is required to design a nepheline syenite plant in the northwestern Iranian city of Sarab and transfer technical knowhow, reported Fooladnews.

According to Mehdi Karbasian, the IMIDRO head and the deputy minister for industry, mine, and trade, the $11.5 million project would annually produce 200,000 metric tons of alumina powder as well as 150,000 tons of industrial salt.

The agreement is one of the latest in Iran’s interaction with other countries especially in mining sector. After the mining and industrial sector remained slack for almost a decade, it seems there is now an international trend to enter Iran’s market. Industrial and mineral companies from Italy, Russia, Azerbaijan, and Kazakhstan are holding regular meetings with the Iranian officials to start cooperation in different projects around the country.

Iran’s ministry of industry, mine, and trade is also restarting its mineral activities in Guinea after a 20-year hiatus. Iran’s investment in the African country comes as Mohammad Reza Nematzadeh, the minister for industry, mine, and trade, said Saturday that attracting foreign investors to mineral projects in the country and participating in foreign projects were among the priorities set by his ministry.

Experts believe the country’s mining sector currently faces challenges including a lack of equity and poor funding, and that a positive result of nuclear negotiations between Tehran and the five permanent members of the United Nations Security Council plus Germany, which is underway in Vienna, would substantially increase business working capital.

The mining sector and its corresponding industries in Iran have a high productivity rate as well as high potential to increase the country’s revenues. Meanwhile, the sector needs new technologies which will reduce production costs and elevate competitiveness of products in the global market. If the sector can access the modern technologies, Karbasian said, the country will be able to produce great wealth by exporting rare earth elements (REEs) which are abundant across the country.

The agreements will also help create new markets for its lead and zinc. Iran currently produces zinc 99.95 while the European countries supply zinc 99.99, said Hassan Hosseinqoli, the head of Iranian union of lead and zinc exporters. Hosseinqoli added that after the sanctions are removed; the final costs for mineral products will decrease, considering the huge sums Iranian producers pay exchange offices for financial transactions with foreign firms. The western sanctions, imposed on Iran over its nuclear energy program, made business relations and transactions with foreign companies almost impossible.

Facilitation of exports would generate more revenues and consequently contribute to the GDP, said Bijan Panahizadeh, the head of industrial and mineral association network of Iran, adding that the mining sector in the country cannot directly import high quality machinery and equipment due to sanctions. They now have to either import the machinery through Turkish companies with an extra 15% price-tag or import Chinese ones which are only good for two years and after that, there would be high costs to maintain or repair them.

Many mineral projects are delayed due to the lack of necessary equity to establish processing units. If the international atmosphere turns in favor of Iran, the new investments will increase equity, said Panahizadeh.

The administration has decreased the money in circulation by increasing the bank account interest rates with the aim of curbing inflation. An economic boom caused by the removal of sanctions will increase the investment return rate and this will consequently decrease bank interest rates; in which case, there will be more investment in the key mineral and mining sectors.