Golden Triangle of Iron Ore, Coal and Natural Gas
One of the basic policies in the Resistance Economy is preventing
crude sale and mines are one of the priorities for employment and
Iran’s mining sector possesses numerous valuable reserves and foreign
investors tend to have a presence in this sector. Based on the studies
conducted, so far about six thousand mines with 70 types of mineral
substances have been located in Iran.
In addition, the country has 15,000 promising mineral regions with 40
billion tons of definitive reserves worth more than $770 billion. Twelve
large and important mines as well as 8% of the zinc and 3% of the lead
reserves of the world are in Iran and our country is the fourth manufacturer
of decorative stones in the world. Iran’s proven copper reserves amounts to
over 30 million tons. The Iranian Mines and Mining Industries Development
and Renovation Organization (IMIDRO) in the past four years, by giving
priority to the issue of exploration, surveyed 250 thousand square meters in
order to exploit more reserves and thus attract domestic and foreign
investment towards mines.
The role played by mines in the gross domestic product (GDP) and economic
development and employment is not that much noticeable and according to the
mining authorities of the country, this sector is in need of serious
attention and support within the framework of a sound and accurate planning.
What follows is an interview with Mehdi Karbasian, Chairman of IMIDRO Board,
on the position of mining sector in Iran.
There are abundant grounds for implementation of Resistance
Economy in the mines sector but less attention has been paid to
the mines in the 6th Development Plan.
What is the status of the mining sector?
Mine is a God-given natural feature not all countries are enjoying. At
present Iran is among the top 15 countries in mineral terms with regard to
extraction and exploration and one of 10 large countries in terms of mineral
reserves. With further exploration and extraction undoubtedly we will be
promoted to a better situation in the world market.
In the year designated as “production and employment” year what is the plan
for further utilization of the mining sector?
One of the basic policies in the Resistance Economy is preventing crude sale
and mines are one of the priorities for employment and production. By
reducing crude sale and through the approach for processing mineral reserves
realization of the country’s economic targets has been placed on the
Are there virgin mining capacities in Iran?
In the mining sector, Iran has high capacities. For example, Mehdiabad Lead
and Zinc Mine is the world’s second biggest mine the extraction of which
started in the 1330s (1950s) and in the next two decades about 57 thousand
meters were drilled. This mine possesses over 600 million tons of mineral
reserves of zinc, sulfide and oxidized soil and about 185 million cubic
meters of tailings.
Currently what is the status of Mehdiabad mine?
In last year’s international auction, an Iranian consortium consisting of
zinc producers and some successful contractors won the auction for a period
of 24 years. The consortium by paying mining royalties will conduct
construction operations for a period of four years and utilize the mine for
20 years to build the 800-thousand-ton factory. The mine faces some problems
for utilization and has foreign applicants for participation. At the
beginning of the administration of the 11th government, efforts
were made for cooperation with this company and the consortium but for
different reasons it did not happen.
What is Iran’s position in zinc production, and what would be the effect of
the utilization of this mine on promoting its ranking?
Utilization of the mine will lead to the supply of 420 thousand tons of zinc
ingots needed by different factories in the country and with the production
of zinc in this factory Iran will be promoted to the eighth place in global
ranking and we hope that more zinc mines would become operational.
How much the big mine rich countries on average take advantage of their
mineral capacities in the field of production and employment?
According to 2015 statistics, most of the successful and progressive
countries in the mining industries fetched about $87 billion through
extraction of mines and by processing them created an added value of about
$640 billion. The figure stood at about $2,400 billion in downstream
industries and created one to 10 million job opportunities.
How much did the incompletion of the mining chain cause crude sale? What
measures have been taken in recent years to prevent crude sale?
In the year 1392 (2013-2014) mineral cycles, especially in the steel sector,
were unbalanced and the comprehensive steel plan was formulated. In the 1404
(2025) Horizon, we should accomplish a production of 55 million tons. In the
past year, we reached an export volume of 6 million tons which is a clear
indication of the Resistance Economy with the introversion and extroversion
approach and our products are being exported. Our country has iron ore, coal
and gas mines and their combination along with the abundance of expert work
force can undo the knot of the mining sector. With the completion of the
unfinished factories and establishment of new factories crude sales can be
prevented and wide employment can be created.
How much attention has been paid to the mine and mineral industries in the 6th
There are abundant grounds for implementation of Resistance Economy in the
mines sector but less attention has been paid to the mines in the 6th
Development Plan. This issue should be taken into consideration that the
private sector in order to be encouraged for investment needs to be paid
more attention. Part of the mining sector which is relative to exploration
is managed by the government and IMIDRO within the past two years has
started exploration of 250 thousand km but the need for public support is
still being felt.
What kind of support should the government offer?
The Mine Insurance Fund could play a significant role in the development of
the mining sector, while the capital allocated to the fund with the
coordination of the government and the Majlis has increased from 100 billion
rials in the year 1394 (2015-2016) to 1,100 billion rials. However, it is
not a big amount and our proposal is an investment of $300 to $500 million
for every five years in order to enable the fund to support the private
sector active in the exploration and extraction of mines. The main point is
that if we have strong resolve to invest in the mining sector, there are
solutions; one is that the private sector be specifically activated because
investment in mining is a risk and this risk should be covered by the
government through the required support but when it becomes operational it
would entail sustainable revenue.
Another point is the absence of infrastructures in the mining sector. Given
that the mines are mostly located in remote areas, there are problems about
the road, electricity and transportation that the government should remove
them. We should accept that elimination of these problems necessitates
What is the role of development organizations such as IMIDRO in the
development of the mining sector?
Due to the problems prevalent in the private sector active in the field of
mining and that return of capital in the mining sector is slower than other
sectors of economy, there is less incentive for making investment in this
sector. Under such circumstances the role of development organizations such
as IMIDRO which offers the required support to the private sector becomes
further clear. This is at a time when in recent years IMIDRO has been beside
active sectors and involved in bilateral partnership.
How would you assess the status of privatization in the mining sector?
Privatization was not soundly implemented in most sectors and IMIDRO
following privatization practices in the recent years is owing 35,000
billion rials for selling 70% of the properties of the organization which is
separate from 200 billion rials that has been given in previous governments
as the settlement of the debts but has never returned and this caused
problems for the organization.
How would you evaluate investment in the field of mining?
After the Joint Comprehensive Plan of Action (JCPOA) grounds were prepared
for the arrival of technology to Iran. We can benefit from the knowledge of
the world and with the necessary guarantees and by utilizing insurance
attract more investment in the mining sector. Japan, South Korea, Germany
and Italy are among the countries which have announced readiness for
participation and investment but this requires cooperation of the Ministry
of Economy, Ministry of Foreign Affairs and the Central Bank to provide the
required facilities so that investment would be attracted.
What measures should the government take for the development of mining?
First all the executive agencies should accept that the mining sector has
proper capacity for the economic development of the country and is in need
of special support. If we could get the raw materials from inside the
country which is possible in many industries, more value added will be
obtained and more job opportunities will be provided. Meanwhile, this
requires cooperation of other branches and the Majlis takes the basic
measures in the field of facilitating the existing rules and regulations.
Sound planning should be made so that in a medium 5-10 year term parts of
the activities will be completed. For example, geology and exploration
should be conducted in a medium-term period and although measures have been
taken still more steps should be taken in this regard.
Have some resources been allocated from the National Development Fund to the
Some assistance has been given by the National Development Fund to the
mining sector and loans have been put in the list but the serious problem in
this field is the resources of the fund. Some of those who have received
loans from the fund for different reasons are not capable of paying back and
there are large amounts of arrears. Although the mining sector is among
priorities of the fund to offer facilities, it needs a more specific look.
How is the export situation of iron ore and its processed products?
Still certain amounts of iron ore are being exported. Last year 20 million
tons of iron ore was exported about which some points are important. We
should explore more iron ore and last year we only explored 7 million tons
which should increase to 40 million tons. Perhaps more exploration is in
need of innovation and new technology. This point should also be taken into
consideration that there is no problem if sometimes raw materials are
exported but the revenues obtained through sales should be spent on making
investment in the same sector and should not be spent as current