Iran’s Mining Sector Statistics
Iran is also among the 15 top major mineral and metals rich
countries, with about 37 billion tonnes of proven reserves, and more
than 57 billion tonnes of potential reserves – in total worth $800
billion in 2014.
What strikes any economic observer of Iran is that the country not only
possesses extensive underground resources – be it hydrocarbon, mineral or
metal – but that it also ranks quite high globally in the production of
many. Iran with about one percent of the world’s population holds more than
seven percent of the world’s mineral reserves. The facts and statistics are
set out in the table below
and the information in this article follows the same sources.
Such extractable underground resources play a very prominent role in both
Iran’s national economy and global trade. Following possible international
agreements and lifting of sanctions, and given the expected higher economic
growth rate, increasing sustainable investments and activity in the minerals
and metals mining sector is crucial for Iran’s development path.
Iran’s Underground Resources
Iran’s hydrocarbons have the significant place in the economy, as is well
known. In 2011, Iran was considered to be the world’s 4th ranked producer of
crude oil and condensate (natural gas liquids), accounting for about 5% of
global output and with 2% of the world’s crude oil refining capacity – along
with 9% of proven global oil reserves; it was also the world’s 4th ranked
producer of natural gas, holding 16% of proven natural gas reserves. Iran
also produced over 2 million tonnes of coal and over 1 million tonnes of
coke in 2011.
But Iran is also among the 15 top major mineral and metals rich countries,
with about 37 billion tonnes of proven reserves, and more than 57 billion
tonnes of potential reserves – in total worth $800 billion in 2014. Iran
also has extensive mineral and metal based production and processing
industry: more than 70 metals and mineral commodities are ored, refined or
manufactured; more than 2% of the world’s output of barite, feldspar,
nitrogen, and sulfur; and more than 1% of the world’s output of cement,
industrial sand (or glass), iron ore, and molybdenum. Iran also globally
ranks as: the world’s largest zinc reserve holder; the 9th largest copper
reserve; 12th iron reserves; 5th largest producer of strontium; has 1.6% of
the world’s total output of cement and 10th in terms of cement export; 11th
largest reserves of lead; has 1.2% of world’s total output of sodium
chloride; 3.7% of barite; world’s 2nd largest producer of gypsum after China
and an estimated 9% of the world’s output; and, of course, Iran is the
world’s oldest, finest and largest producer of turquoise stone.
The industry structure is slightly complicated. By 2011, 5,500 potential
mines existed in Iran, of which over 3,000 were operating, and extracting an
estimated 220 million tonnes per annum. The majority of these mines were
private while 218 were Government owned: with nearly 100,000 persons
directly employed (and a further estimated 400,000 indirectly). The largest
number of employees are in mining for decorative stones and gravel (28,000
persons), iron ore (13,000), lime stone (7,200) and copper ore (5,300),
respectively: of which only half the employees are considered as “skilled”.
There were also about 900 active mining cooperatives, with about
46,000 members and 9,000 workers.
Iran’s mineral reserves are estimated to be valued at $800
billion (2014), while investment in underground resources
extraction has been estimated by some to be at 30% of all
investments in recent years.
The total value of production in the metals and minerals mining sector
(including coal) was about $5 billion (the exchange rate of the time -
$/1200Rials – has been used throughout). The total input and material costs
of this production were about $1.3 billion (of which wages/salaries were
about $700 million). The expected value added (i.e. sector GDP) was about
$3.7 billion: or probably less than 1% of national GDP. Most of the value
added was in mining of iron ore, copper and building material and stones.
Many factors may have contributed to the small contribution of mining to
GDP, including: lack of suitable infrastructure, legal barriers, exploration
difficulties, and government control over resources. However, once
mining-related industry production (e.g. including final metals and cement
production) is also considered, the sector contribution rises to about 5% of
Iran’s mineral reserves are estimated to be valued at $800 billion (2014),
while investment in underground resources extraction has been estimated by
some to be at 30% of all investments in recent years. About $600 million of
investment was undertaken in the mining sector in that year – most of it,
again, in iron ore and building material. It is also estimated that between
2000 to 2010 about $2 billion was invested in the mining sector. The Tehran
Stock Market, as a further indicator, had nearly half of its
capitalization in mineral industries in 2009: and given the
sectors high profit margin (of 60% or so).
The above is also well indicative of the link between iron ore and building
materials with urban development and infrastructural building: the two
latter being probably Iran’s main economic growth engines. As further
indicators, Kerman province is the largest producer of mining value added,
followed by Yazd province; they are also the largest investment provinces
respectively. Some further production highlights are indicated below.
The Sarcheshmeh mine in Kerman Province contains the world’s
second largest single reserve of copper ore. It also has gold. In 2010, Iran
ranked 10th in copper ore production and 12th in copper cathodes production; and exported over $1billion worth of copper cathodes. The
National Iranian Copper Industries Company
(NICICO) is one of the
largest companies listed on the Tehran Stock Exchange.
Iron and Steel.
Iran produced about 33 million
tonnes of iron ore (fines,
lumps and concentrate) in 2011 – ranking as the 9th largest producer of iron
ore – mainly from the Chadormalu and Gol Gohar Iron Ore mines (which
together account for 80% of iron ore production in Iran).
Mining and Industrial Company produced 10 million
tonnes of iron ore and is the largest iron ore producer listed on the
Gol Gohar Iron Ore Company
produced 7 million tonnes of iron ore, and its
plant near the southern city of Sirjan is the biggest of
its kind in the Middle East (producing 5 million tonnes of iron ore per
year, enough for production of 2.5 million tonnes of steel).
Iran is the 8th cement producer in world and 2nd in the Middle
East - producing over 50 million tonnes of cement per year and
exporting to 40 countries.
Iran became self-sufficient in steel production in 2009, producing
7.5 million tonnes of direct reduced iron (DRI), or 13% of global DRI
production and 41% of total Middle East DRI production. Iran is the world’s
16th steel producer. The major raw steel producers in Iran are:
Steel Mill (estimated 47% market share in 2010);
Steel (23%); and,
Isfahan Foundry (20%).
In 2010, Iran established the largest
production plant for
automobiles in the Middle
East: the plant, owned by
Iran Khodro and
, has a capacity of 400,000 tonnes per annum.
Iran’s aluminium production is expected, according to IMIDRO, to exceed 1.5
million tonnes by 2020. Planned projects include Alumina Mine’s
100,000 tonnes per annum project in North Khorasan, the
276,000 tonnes per annum South Aluminium project and the 375,000 tonnes per
annum Khuzestan Aluminium project. The largest plants for aluminium
production in Iran are Iralco, Almahdi, and
Lead and Zinc.
Iran has over 220 million tonnes of proven zinc and lead ore reserves: about
5% of the world’s reserves. In 2009, it ranked 15th in the world in terms of
zinc and lead production; and exported 77,000 tonnes of zinc and lead
concentrate and ingot. The two important mines in Iran are: Mahdi-Abad,
with 75 million tonnes of ore with a zinc concentration of 6% and a lead
concentration of 2.7%; Angouran, with 16 million tonnes of ore with a
zinc concentration of 26% and a lead concentration of 6%. The largest
producers are: Iran Zinc Mines Development Group; Bama Mining and
Industrial Co.; Bafgh Mines Co; and Calsimin Co.
Iran is the 8th cement producer in world and 2nd in the Middle East -
producing over 50 million tonnes of cement per year and exporting to 40
countries. Iran constitutes 1.8% of the world’s cement production - and also
1.6% of the world’s cement consumption. It also has significant engineering
capacity: IMIDRO reported that 9 countries (including
Syria, Venezuela, Bolivia, Algeria, Lebanon,
Ecuador, Iraq, Belarus)
will have Iranian manufactured cement plants. With nearly
60 active production units in Iran, half are listed on the
Tehran Stock Exchange: the main ones being Fars and Khuzestan Group (market
share of 24%), Abyek (8%), Tehran (7%), and Sepahan (6%).
Governance and Financing
The Mining Code of 1998, and its amendments, regulate mining in Iran; the
5th Five Year Development Plan (2011-2015) has proposed that production
capacities of mineral commodities be increased significantly; while Articles
44 and 45 of the Constitution support resources extraction and development
and the prompting private sector development in this field. The Ministry of
Industries, Mines and Trade administers all mineral and metal mining,
smelting, and refining industries.
Various international sanctions imposed on Iran have, however, affected the
mineral sector, which historically has required large investments to develop
mineral deposits (especially metal ores and crude petroleum) and to process
the minerals. Initially, the petroleum sector was the focus of sanctions but
prohibitions on other types of transactions followed, including targeting of
international investments and the provision of goods and services that could
enhance Iran’s ability to import, including finance, brokering, insurance,
and shipping services, as well as restrictions on Iran’s access to bonds and
insurance markets, and transfers of funds to and from Iran. The Government
program to phase out subsidies to the economy, together with international
sanctions, made the availability of affordable energy, of funding, and
access to export markets also more difficult for small and medium sized
mining operations vis-à-vis the larger Government-affiliated companies.
Although most of the country’s mines are privately owned, the Government -
primarily through the Iranian Mining Industries Development and
Renovation Organization (IMIDRO) - controls many of the larger capacity
mining and mineral-processing companies, especially those that produce
aluminum, ammonia, coal, copper, iron and steel, and sulfur. The Government
is, however, increasingly anticipating divesting some of its interest in
mineral-related operations. IMIDRO has, since 2002, transferred Government
owned assets to the value of $30 billion to the private and cooperatives
sectors – using the revenue to mainly pay off general Government debt. It is
also now overseeing the development of eight iron and steel plants in eight
provinces of Iran. Another entity, the National Iranian Mining Company
is estimated to be the world’s 23rd largest mining holding company - with
0.6% of the world’s total mining production.
The Government is seeking foreign investment for the
development of the mining sector. Numerous production-capacity expansion
projects and new mineral commodity development projects in Iran’s mineral
sector are underway and planned – some of it through IMIDRO. In the steel
and copper sectors alone, it is seeking to raise around US$1 billion in
There has been
some foreign investment in the mineral sector over the past few years;
however, international funding for capital-intensive mineral-metals projects
has been limited owing to sanctions. The Government’s 20-year Perspective
Plan for the mining sector intends to attract $20 billion, mostly in foreign
investment, and will partly require use of “buy-back” methods for attracting
foreign capital, services and technical expertise, while intending
to expand exports. The types of projects eligible for such buy-back
agreements and foreign loan facilities include: projects that complete
aluminium metal production lines, projects that mobilise coal, iron ore,
steel, copper and pigment metals production, ferro alloys projects and gold