Mining in Iran
Found in: Economy of Iran
Irans mining industry is under-developed. The most important mines include coal, metallic minerals, sand and gravel, chemical minerals, salt, etc. Khorasan has the most operating mines. Mineral production contributes only 0.6 per cent to the countrys GDP. Add other mining-related industries and this figure increases to just four per cent. Many factors have contributed to this, namely lack of suitable infrastructure, legal barriers, exploration difficulties, and government control over all resources.
Although the petroleum industry provides the majority of economic revenues, about 75 percent of all mining sector employees work in mines producing minerals other than oil and natural gas. These include coal, iron ore, copper, lead, zinc, chromium,barite, salt, gypsum, molybdenum, strontium, silica, uranium, and gold (most as a coproduct of the Sar Cheshmeh copper complex operations). The mines at Sar Cheshmeh in Kerman Province contain the world's second largest lode of copper ore (5% of the world's total). Some 128,500 tons were extracted in 20002001. Large iron ore deposits lie in central Iran, near Bafq, Yazd, and Kerman.
Iran also produced orpiment and realgar arsenic concentrates, silver, asbestos, borax, hydraulic cement, clays , diatomite, feldspar, fluorspar, turquoise, industrial or glass sand (quartzite and silica), lime, magnesite, nitrogen (of ammonia and urea), perlite, natural ocher and iron oxide mineral pigments, pumice and related volcanic materials, caustic soda, stone , celestite, natural sulfates (aluminum potassium sulfate and sodium sulfate), and talc. Iran also may have produced ferromanganese, ferromolybdenum, nepheline syenite, phosphate rock, selenium, shell, vermiculite, and zeolite, and had the capacity to mine onyx.
In 2005, of 3125 operating mines, 2747 and 378 mines were run by private and public sectors respectively. The government owns 90 per cent of all mines and related large industries in Iran and is seeking foreign investment for the development of the mining sector. In the steel and copper sectors alone, the government is seeking to raise around US$1.1 billion in foreign financing.
In the early 1990s 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) was introduced to bypass constitutional constraints on foreign investment and avoid potential political difficulties within the country. The scheme has government support for being an efficient means of attracting foreign capital, services and technical expertise, while reducing foreign exchange expenditures and expanding exports. If the Iranian Government is to fulfil its 20-year plan to improve the countrys mining sector, its estimated that US$20 billion, mostly in foreign investment, will be required.
Projects eligible for buy-back agreements and foreign loan facilities are:
Projects that complete aluminium metal production lines
Projects that mobilise coal, iron ore, steel, copper and pigment metals production
Ferro alloys projects and gold production
Iran imports the following equipment to support its mining sector:
Mining equipment such as drills, loaders and shovels
Support equipment such as bulldozers, graders, trucks and auxiliaries
Utility equipment such as compressed air plant equipment, water and waste-water treatment equipment
Mechanical equipment including equipment for crude ore handling, grinding, separation and treatment purposes
Laboratory and workshop equipment
Power supply and distribution equipment
Process control instruments
Most of the electrical distribution equipment for water supply and treatment utilities, along with steelworks and storage facilities are manufactured locally. There is a demand for high quality second-hand machinery in Iran.
To date, doing business in Iran has had political overtones. In this regard, countries which can maintain a neutral and impartial political image in the Middle East are advantaged.
National Iranian Oil Company
Economy of Iran
List of Major Iranian Companies
Foreign Direct Investment in Iran