Iran goes beyond oil — to sign $5.4bn in mining deals with Italy, France

Iran goes beyond oil — to sign $5.4bn in mining deals with Italy, France

Sarcheshmeh copper complex, operated by the National Iranian Copper Industries. (Image courtesy of NICICO)

Iran’s full-re-entry into the world energy market upon the lifting of sanctions has hurt oil prices further, sending them below the psychologically significant $30-a-barrel level last week.

The question in everyone’s mind now is how Iran's incursion into the mining industry will affect an already struggling sector, hit by a sustained rout in commodity prices.

Investor took renewed interest on the subject Monday, as Iran’s Deputy Industry, Mine and Trade Minister, Mehdi Karbasian, said his country hopes to finalize investment plans worth about $5.4 billion during President Hassan Rouhani visit to Italy, where he arrived Monday, on the first leg of a landmark visit to Europe.

The potential deals, Tasnim News Agency reports, include joint investments in the steel production chain in southern Iran, in an area stretching from Chabahar on the Gulf of Oman to Bandar Abbas and Jask in the Persian Gulf.

Karbasian is also expected to ink a contract with Italian and Chinese firms to carry out the second phase of Salco, Iran’s largest aluminum smelter plant, Trend News Agency reports (subs. required).

Karbasian is also expected to ink a contract with Italian and Chinese firms to carry out the second phase of Salco, Iran’s largest aluminum smelter plant.

The minister said another memorandum of understanding has been worked out with a French company for downstream aluminum projects, which the parties plan to finalize during Rouhani’s visit to Paris.

Italian firms are interested in aluminum and steel projects, while French companies seek also technical cooperation, Karbasian has said in the past.

Japan’s leading steelmakers are also said to be eying Iran’s mining potential, especially its titanium projects.

Tehran is opening $29 billion of mining projects to foreign investors, roughly equal the oil and gas investments up for grabs.

Last year, the mines ministry announced the discovery of two large coal and iron ore deposits in the Lut desert, in central Iran, which is already the number four supplier of iron ore to China.

According to official data, Iran ships some 15–20 million tonnes of iron ore a year, though that figure would have fallen substantially given the slide in the price and the high cost of mining inside the country.

Currently, the nation has more than 3,000 active mines, mostly privately owned, which focus on copper, iron ore and heavy rare earth elements.

Click here for photo essay of Iranian coalminers by Yunes Khani for Mehr.