Iran Mining Review

 

Esfahan Malleable Co (EMC)

Kamran Shirani

 

 

 

 Current Position of Iran Mining

 

     Iran is rich not only in oil and gas, but in mineral deposits’, as well. Iran has the world’s largest zinc reserves and second-largest reserves of copper. It also has important reserves of iron, uranium, lead, chromate, manganese, coal and gold .In addition to the major coal mines a number of smaller mines are located in Iran. [1]

 

Deposits of lead, zinc and other minerals are widely scattered throughout the country. The mines at Sar-Cheshmeh in Kerman province contain the world’s second largest lode of copper ore. [2]

 

Iran has more than 68 kind of mineral, total country reserve is 43 Billion MT, with an estimated value of 700 B USD.

• Iran Export of mines and mining industries was around 8 Billion US$ yearly

• Mines and Mining Industries currently employee more than 620000 person in Iran

• Market Share of mine and mining industries in Tehran Stock Exchange is more than 25% of total value of Stock Exchange equal to 30 B USD. [1]

 

The country is one of the most important mineral producers in the world, ranked among 15 major mineral-rich countries, holding some 68 types of minerals, 37 billion tons of proven reserves and more than 57 billion tons of potential reserves worth $770 billion in 2014. Mineral production contributes only 0.6 per cent to the country’s GDP. [3]

 

The most important mines in Iran include coal, metallic minerals, sand and gravel, chemical minerals and salt. Khorasan has the most operating mines in Iran. Other large deposits which mostly remain underdeveloped are zinc (world's largest), copper (world's ninth largest reserves in 2011, according to the managing director of National Iranian Copper Industries Company), iron (world's 12th largest in 2013 according to the US Geological Survey),[5] uranium (world's tenth largest) and lead (world's eleventh largest). Iran with roughly 1% of the world's population holds more than 7% of the world's total mineral reserves. [3]

 

Nearly 30 percent of Iran's investment budget has been allocated to mining field. In 2008, around half of the stock market's capitalization was in mineral industries. With 58% profit margin, mining had the highest rate among the top 100 Iranian companies. In 2009-2010 mining exports reached $8.13 billion which covered 32% of Iran's non-oil exports. [2]

 

 

Iron Ore

Iran has proven reserves of iron ore amounting to two billion tons and expects to increase the amount to three billion tons by 2010. The country produced 11.5 Mt of iron ore in 2003 compared to 11.3 Mt in 2002. [4]

Iran produced 48mt of iron ore in 2012 comprising close to two percent of global iron ore output, while its crude iron ore reserves are estimated at 2.5bt with 1.4bt of iron content. [5]

 

Copper Resources

32.5 million tons of copper reserves made Iran the 9th largest in the world as of 2009, beside rankings as 10th in copper production and 17th in copper cathodes production as of 2010. The copper extracted from Sar-Cheshmeh mines in Kerman province, with 99.99% purity, is of highest quality and consists 5% of the world's total. National Iranian Copper Industries Company (NICICO), one of the largest companies listed on Tehran Stock Exchange, was the largest non-oil exporter in Iran in 2010 with exports worth $1.3 billion. [2]

 

 

Zinc and Lead

Ran with over 220 million tons of zinc and lead ore proven reserves has nearly 5% of the world's metal constituent. [2]

Iran has over 220 million tons of proven zinc and lead ore reserves. With approximately 11 million tons of zinc metal constituent and 5 million tons of lead metal constituent, Iran has just below 5% of the world’s metal constituent reserves. [3]

 

 

Iran’s global ranking in minerals production

Iran's rank stood at 14th in steel, 4th in cement and 9th in iron ore production respectively in 2014. Iran's name does not appear in the 2014 global ranking for aluminum production, while the country ranked as the world's 18th largest automaker. As per the report, China is the leading country in all five major industries.

  The following is a list of some of Iran's industrial mining production and their international rankings: [6]

 

 

Steel

 Steel Production at Over 16m Tons Iran ranked 14th in the world in crude steel production in 2014, increasing output by 5.7% over the previous year's level to 16.331 million tons.

Iran's steel production grew by 10%, 8.7%, 11.2%, and 6.4% respectively in the four years leading to 2014. Iran's global ranking has improved from 17 in 2010 to 16, 15, 15 and 14 from 2011 to 2014. [7]

In addition, these projects have resulted in industrial decentralization, development of underprivileged regions, increase in GNP and promotion of industrial infrastructure. Iran is the world's 16th steel producer. [3]

 

 Iron ore

 In 2009 Iran will produce 25.5 million tons of iron ore (fines, lumps and concentrate), – Alternatively, U.S. Geological Survey ranked Iran, the 8th largest producer of iron ore in 2009 with 33 million tons of output.

 Chadormalu and Gol Gohar Iron Ore are the two largest iron ore mines (accounting for more than 80% of iron ore production in Iran).

Chadormalu Mining and Industrial Company produced 9,498,000 MT of iron ore. It is the largest iron ore producer listed on the Tehran Stock Exchange.

Gol Gohar Iron Ore Company produced 7,209,000 MT of iron ore; Gol Gohar pellet plant near the southern city of Sirjan, the biggest of its kind in the Middle East, uses iron ore concentrates from the Gol-e-Gohar mine in the province. The new plant produces five million tons of iron ore per year.

Iran Central Iron Ore Company produced 5,310,000 MT, with the remainder produced by other smaller public sector miners. In 2009, Iran exported about 10 million metric tons of iron ore.

Iran's iron ore production reached 45 million tons in 2014, placing the country as the ninth largest iron ore producer in the world. Iran's ranking stood at 10, 10, 10, and 9 in 2010-13 respectively. The country has experienced 15.2%, 0%, 32.1%, 35.1% and -10% growths  In the mineral's production from 2010 to 2014.

 This is a list of countries by iron ore production based on U.S. Geological Survey data. [8]

 

World's 4th Cement Producer
Iran was ranked as the world's fourth biggest cement producer in 2014 with 75 million tons, accounting for 1.8% of global production. Iran's share in the global cement production in the years 2010 to 2013 stood at 1.5%, 1.7%, 1.8% and 1.8% respectively.

Iran's global ranking in cement production has remained unchanged over the past four years, having improved from the fifth rank in 2010. Cement production has grown by 25%, 22%, 14.8%, 2.9% and 4.2% respectively from 2010 to 2014. [9]

Aluminum Production

Iran's name does not appear in the global ranking of the biggest aluminum producers in 2014. This is while Iran's ranking in the years 2010-13 had stood at 27, 28, 25 and 21 respectively. The report also suggests that Iran's aluminum production has grown annually by 16.7%, 2.7% and 30.4 % from 2011 to 2013 respectively. [3]

      
Coal production

Iran has recoverable proven coal reserves of nearly 1.9 billion short tons, and with total estimated coal reserves of more than 50 billion short tons. In 2015 Iran will produce 1.7 million tons of Coke. [3]

 

Copper

Iran ranked 10th in copper production and 17th in copper cathodes production (220,000 tons). In 2009, Iran exported $1.2 billion worth of copper cathodes. National Iranian Copper Industries Company (NICICO) is one of the largest companies listed on the Tehran Stock Exchange and was the largest non-oil exporter in Iran in 2010 with exports worth $1.3 billion. [3]

 

 Zinc and lead Production

In 2009, with approximately 165,000 tons of production, Iran ranked first in the Middle East and 15th in the world in terms of zinc and lead production. In 2009, Iran exported 77,000 tons of zinc and lead concentrate and ingot.

[3,7]

 

 Investment

The government owns %90 of all mines and related large industries in Iran and would like to attract foreign investment for the development of the mining sector. As per Article 44 of Constitution of Iran, the government has been actively promoting the privatization of all mines. [1]

 Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) is the major state-owned holding company. Although 90% of the country’s mines and related large industries are in state hands; the government has stated its intention to further develop the sector through private and foreign investment. Minerals targeted for investment include aluminum, copper, and iron ore.

By the end of the current Five-Year Development Plan (FYDP), which began in 2010, the government expects to boost the mining sector’s contribution to GDP to 1.2% as well as boost total mineral production to 500 million tons. With 12% of the Persian Gulf region’s aluminum reserves, the implementation of development projects could boost production to 1.5 million tons by 2025 and turn Iran into one of the top 10 producers in the world. The private sector is also being mobilized to get the mining sector to work with modern equipment.

 • There are approximately 5,000 mines in operation in Iran, with 12 metals and 36 non-metal ores currently being exploited.

• Increased investment and private sector involvement will see mineral production increase in the coming years as modern machinery and equipment are put to use.

• Iran is one of the top 10 global producers of iron ore, with over 35 million tons of output per year.

• Iran’s precious stones have become an object of admiration for onlookers as well as a profitable industry for the country as it aims to diversify its economic strengths.

• As one of the 15 most mineral-rich countries in the world, Iran enjoys export links with 159 countries, including Iraq, China, the UAE, India, and Afghanistan. Mining products represent over 30% of the country’s non-oil exports, and the sector also employs 100,000 people directly and up to half a million indirectly.

• Developments in the country’s base metals segment, including copper, aluminum, zinc, and lead, also continued over the last 12 months. Iran has the world’s biggest zinc reserves, second largest copper reserves, and ninth largest iron reserves.

• Iran is also rich in zinc and lead, with over 220 million tons of proven reserves. Production remains below 200,000 tons for zinc and lead, with just under half exported. %80 of the income from producing and mining activities ,which is derived and declared by producing  and mining enterprises of cooperatives of private sectors of whom exploitation licenses are issued , or with whom extraction and sale contracts are concluded, from the beginning of the year 2002,on words by relevant ministries ,shall be exempt from the tax set forth in the article 105 here of for a term of 4 years beginning from the date of exploitation or extraction the less developed regions ,the exemption shall apply to %100 of the income for a term of years. [1]

Advantages of Investment in Mining Sector

 The mining sector is the infrastructure of economic development. Mine and Mining industries supply and complement other industries and a boost in this section would be directly or indirectly effective in increasing non-oil revenues. If the advantages of the mining sector are used properly, income of this field will be increased significantly.

 The high contribution of the mining sector to the GDP is one of the indications showing the privileges of this sector in the county for making investment and demanding government support. Iran is in possession of one percent of the mineral surface and about three percent of the world’s known mineral reserves. It has 68 types of strategic mineral substances but has not been able to use the reserves and capacity to serve the national economy properly.

 Although Iran is a country rich in mines, however no proper investment has been made with regard to the existing capacities. From the beginning of oil exploration in Iran, around $1,000billion has been fetched from oil, only $23 billion of which has been invested in the mine and mining industries in Iran in the past 50 years. [10]

  “The number of foreign companies announcing their readiness to invest in Iran is very high. There were many applications for cooperation from German, Danish, Kyrgyz and Indian companies, which are multinational firms, or those from Persian Gulf littoral states such as Oman and Kuwait,” Mehdi Karbasian added.

 Karbasian, who also heads Iranian Mines & Mining Industries Development & Renovation (IMIDRO), made the statements in an interview with the Persian daily Iran.

The official added that companies from Australia, the Switzerland, Spain, Belgium, Canada, Belgium, Britain, France and South Korea have expressed interest in Iran’s industrial and mining sectors, while Chinese and Russian firms are already active there.

“These companies have started talks (with Iran) after the new government took office,” he said.

 "Therefore IMIDRO wants to attract foreign investors to compensate the shortcomings of past years. In line with this, the laws are geared to attracting foreign investors," he said.

"Companies, which have only had trade and industrial relations (with Iran) in the past eight or nine years, are now keen on investing in Iran. Although there were companies and that severed ties with Iran, they announced their readiness to return following the change in government and its professional outlook toward foreign investors," he said. [11]

 

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