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September 2018, No. 88


IMIDRO Exclusive

Russia to Invest in Mehdi Abad Mine

Deputy minister of industry, mine and trade announced the presence of Russian companies and their investment in Iran’s mining and mineral industries.

Dr. Mehdi Karbasian, CEO of IMIDRO (Iranian Mines & Mining Industries Development & Renovation Organization), said: “We forecast an investment of one billion dollars by the Russians in this sector. There will be no restrictions if some challenges and monetary and banking problems are solved. We hope that the final deal will be concluded with the Russian side as soon as possible.”

He added: “Following the visit of President Hassan Rouhani to Moscow, a number of large Russian companies have come to Iran to study grounds for investment in exploration and mineral industries as well as fields such as copper and zinc. They have held negotiations with various parties in Iran, including IMIDRO. Of course, they have not yet come to a final conclusion, but we hope the talks will have good results.”

Karbasian said: “Two Russian companies have come to Iran; one of them has received blueprints and will soon submit its proposals. We have agreed to make joint investments in two exploratory areas. The consortium includes Golgohar, Sarcheshmeh Copper, Chadormalou and Mines and Metals Investment Development Company. In fact, this Iranian-foreign venture is after exploring new mines in the areas of interest and finding new mineral deposits.”

Noting that the investment of this project is SBI foreign investment, the IMIDRO chief continued: “There is another major Russian company we have reached initial understanding with so that funding will come from the sale of Iranian oil in Russia. We have reached an agreement of $1 billion annually in general but the Russians want to deliver half of the money in the form of goods. The Central Bank of Iran (CBI) however insists that all the money should be paid in cash.”

Noting that these theoretical disagreements should end in the national interests of Iran, Karbasian said the Russians argue that if they are supposed to sell Iranian oil and make the whole payment in cash it would not be beneficial for them. That is why they insist to pay part of the money in kind. If this does not happen, they would probably refuse to strike a deal because they believe they would lose money.

He said IMIDRO, with the help of the Trade Promotion Organization of Iran, has made a priority arrangement in this regard according to which Iranian companies can provide Iran with its necessary and strategic needs and buy from Russia. Of course, there should be a plan on how to make the payments because the CBI wants to get all the credits in cash so that it could provide rubles to the businessmen. But given the shortage of liquidity in the market and the need to support national production, it is expected to provide a more appropriate approach to producers.

He said Mehdi Abad area has been completely handed over to the Iranian investors, adding: “It is possible to benefit from services of a Russian consultant but the partners are all Iranians.”
Karbasian said Russia is among the five top countries in the area of mine and mining industries with valuable experience in the field.

He added that IMIDRO, along with other government agencies, has been preparing the ground for $1 billion in Russian investment in Iranian mines and mining industries.

The scope of activity is not restricted to certain mineral areas but could cover primary materials such as alumina powder, coke coal, some other cyanide minerals and other basic materials needed for the production of gold, drilling machines, mineral machinery, etc, he said, adding that these items are not produced inside the country and Russia can become a major supplier of these items.

 

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  September 2018
No. 88