MENA MINING (VI): Iran

This post was originally published July 21, 2011

MENA MINING (VI): Iran

Iran is located between Iraq, Afghanistan, Pakistan and CIS countries and is the center of a number of international politics issues that I am not going to discuss. However, here are some notions from the Marker Global Ltd. document MIDDLE EAST/ IRAN OIL SECTOR: MAPPING INVESTMENT RISK JANUARY 2009

·        “Security risks in Iran are low when compared to other oil producers, such as Iraq and Nigeria.

·        Logistically Iran has a satisfactory infrastructure, including an electricity supply that is mostly reliable and a good network of paved roads.

·        Iran has a high-level of education when compared to its neighbours, and skilled labour is available. English-speaking employees will be harder to find.

·        Culturally and aside from any business negotiations, Iranians are likely to be cooperative hosts who are eager to assist foreign companies and their employees.

·        Iran is subject to US and EU sanctions and some imported equipment and parts needed in the oil industry will be hard to obtain. Many foreign companies operating in the country have had parts smuggled from the UAE and other neighbouring countries. Most equipment can be sourced in this .

·        Aside from tension with the US and Israel, Iran has no other major flashpoint for external conflict…”

A special legislation called the Foreign Investment Promotion and Protection Act (FIPPA) and a state agency, Organization For Investment, Economic and Technical Assistance of Iran, are the key country players to encourage FDI and improve the investment picture for business. The buy-back method of transaction (the government buys back the industrial project after the foreign direct investor has recouped his initial investment in the project plus a predefined profit) is reportedly prevailing.

According to some data, on third of Iranian economy is depending on the activities of mining sector.

Iran is rich not only in oil and gas, but in mineral deposits, as well. It has the world's largest zinc reserves and second-largest reserves of copper; important reserves of iron ore, uranium, lead, chromite, manganese, coal and gold. Based on the records released by the Ministry of Mines and Industry, total measured and indicated resources are estimated at about 52,000 Mt, (resources of metallic ores are estimated at about 6,000 Mt and resources of non-metallic and construction minerals exceed 26,000 Mt).

However, the mining industry remains underdeveloped at this time. Thus, the government is actively encouraging foreign participation in this sector. Currently foreign companies are already active in virtually every aspect of mineral production in Iran -- from surveying to conducting feasibility studies to providing equipment for smelters.

96% of its mines are operated by the private sector with the government owning only 4%. The list of major mines may be found here. Iran Mining Portal lists 240 mining companies in Iran, although, probably, most of them a small.

 Source: MEMRI Economic Blog.

The Geological Survey of Iran Web-page has an abundance of information on minerals resources, as well as legislation (this page has Mining Code of I.R.). If you go to the page Minerals Information of Iran you have an interactive map where you may find information about deposits on all minerals, e.g. on iron ore

as well as this document:  Exploration of Iron Ore Reserves in Iran (as of 2007).

Another source of information is National Geoscience Database of Iran with specific data in all deposits.

Web-page Iran Mining provides interactive search on deposits, e.g. for iron ore in Angouran:

One of the latest (January 2011) resources on the industry is COUNTRY DOSSIER ON MINING & MINERALS IRAN that is compiled by Indian Centre for Techno Economic Mineral policy Options (C-TEMPO). It has all necessary data on deposits, mineral industry, including mineral law. Here is a part of useful table, that shows geological features, time and mineral resources found in the different regions of the country:

Some information on mining is available from Iranexpormagazine Website – including investment and zinc production.

A very amusing and informative presentation was dome by a group of scholars from the U.K./ and Iran: ECONOMIOC ANALYSIS OF THE COPPER MINING INDUSDRY OF IRAN . In fact, besides good financial analysis of Iranian Copper Industries Company (NICIC), it has a vivid description of privatization from Britain to Gorbachev-Eltsin:

Selected list of mining companies:

Iron ore: Gol Gohar Iron Ore Company and Chadormalu Mining and Industrial Company

Copper, Molybdenum: Iranian Copper Industries Company (NICIC)

Lead concentrates, Zinc concentrates: Kalsimin Co., one of the largest zinc producer in the Middle East; Iran Zinc Mines Development Group,Bama Mining & Industrial Co.,

Some useful links:

·                  Guide to Invest in Iran – an official Brochure with detailed explanations

·                  DOING BUSINESS IN IRAN – by Dayarayan Auditing & Financial Services Firm – a bit outdated, but has a lot of fiscal information

·                  Information on mining sector is provided in Iran Investment Monthly  by Turquoise - a boutique investment firm based in Iran with offices in Tehran and London

·                  AN ANALYSIS OF ECONOMIC REFORMS IN IRAN – Bijan Khajehpour