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Business and investment opportunities of Mining in Iran

Investment in Iran's mining sector

  • Release date: 2 تیر 1397
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Publish Date: 6/3/2017
Visited: 387

 

Iran is a country with an area of 1648195 square meters that have wide range of geological periods and tectonic evolution in its place and one of the richest countries in the world in terms of mining resources, by having the heterogeneous crust and various geological processes including 68 kinds of mineral (non-oil), 37 billion tons of discovered reserves and 57 billion tons of potential reserves is one of the world's 15 mineral powers.
There are 8840 mines in Iran which among them 5873 are active, and 2546 are disabled and 421 are being equipped.
A big share of mines in Iran belongs to building materials and decorative stones (74 percent). 20 percent non-metallic and other 6 percent are metallic. But the highest share of production belongs to Metal mines.
The most important mineral deposits in Iran are copper, lead, zinc, chromite, iron, phosphate and manganese that benefits from ornamental stones such as marble, travertine, and turquoise.
So far, 124000 persons directly have been employed in the mining sector.
According to data of ILO for each direct job in the mining sector, 17 dependent and supplementary jobs are created in this sector. And despite of being a country rich in mines and minerals, the share of mineral products is less than one percent of Iran’s GDP. However, this section can be expanded according to the mentioned capacities.

In recent years, macro-economic policies in Iran focuses on diversifying the economy and increasing the share of non-oil products in economy’s share and the mining sector is one of the items considered in these policies.
Mining industry can play an important role in Iran’s economic and dependency to oil and fossil fuels regarding the poor source of mining materials in neighbor countries and the region, and sufficient infrastructure facilities of export and to sale the mineral products to other remote locations via network of rail and shipping that are inexpensive transports.

To improve industrial sectors in mining in Iran all activities and arrangement needed are considered by legislative and executive bodies of the government which results in serious changes such as customs tariffs alteration to cut down taxes, increase loans and non-cash facilities in order to explore and exploit mines.
These points with cost of inexpensive fuel, accessing to infrastructure facilities or supplying them at very low cost have provided perfect situation for private investment in Iran’s mining sector.
Moreover, easy access to educated workforce with different orientations can provide good opportunity to human resources.
As said above, activity and investment in Iran’s mining sector can be one of the interesting fields with great opportunities but investors must consider that mining industry demand a long-term vision of the return on investment.


Opportunities
Opportunities of investment in Iran’s mining industry includes
First, potential and the capacity and appropriate markets in neighboring countries, which includes:
1. Richness and abundance of mines and minerals in Iran
2. Existing the roads and maritime ways for exporting the mineral products to neighboring countries
3. Existing the expert human resources due to the nearly 70 years of academic training in Iran
4. Accessing to affordable energy that lead to competitive pricing for mineral products
5. Increasing the tax breaks for mining sector
6. Reducing the customs tariffs for export
7. Mineral poverty in neighboring countries especially countries in around Persian Gulf

Fields of activities in mining include:
1. Exploration
2. Extraction
3. Processing/ Producing
4. Export
5. Improving the running processes in the exploration, extraction and processing

Business recommendation
regarding the points discussed above and great potential for mining sector in Iran; investment in the mining sector can be a confident and good opportunity because Iran's neighbor countries high demand for these resources and prepared export substrates.
In addition it should be noted that investment in the mining sector is a long-term investments, therefore, it is suggested that all investment in this field must be done in two ways:
First, the investor with small fund and field study must try to identify capacities of various mines. Then exploit the mines by macro investing which cause low cost and risk for fieldwork and mineralogy.
Second, possibility of success and recognition of more rich and productive mines will be increased because of investigating the several different locations.
It should be noted that despite of all favorable investment opportunities in this sector, there is probability of projects failure. So to cut the risks of failure conducting feasibility study of projects and investment opportunities are highly suggested, since Feasibility study investigates all effective aspects and opportunities that can lead a project to succeed and identify all challenges and problems.

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