Mining to Iran
Trends and opportunities
Iran is ranked the world’s 15th most mineral-rich country.
It is well-known Iran is one of the major petroleum exporters. Oil and natural gas dominate Iran’s economy, and oil exports provide the principal source of income, contributing more than 80 per cent of foreign exchange earnings.
Development of the Iran’s mineral industry is a key focus in the drive to diversify from petroleum exports. In the last decade, Iran has invested heavily in the mining and mineral industry sectors and seek to increase the export of processed minerals instead of the raw materials. Iran’s 2025 vision objectives include increasing annual production to 55 Mt of crude steel, 800,000 tonnes of copper cathode, 1.5 Mt of aluminium, 200 Mt mineral products, 300,000 tonne of zinc and 5,000 kg of gold.
Over 114,000 employees work directly in mines and over 60,000 employees work at mid-stream and downstream-relevant manufacturing establishments.
Exploration of new reserves in copper and poly-metals, phosphate, nickel, iron ore, and precious and semi-precious stones are key investment priorities in the country. The government plans to invest over $40 billion, including $20 billion from foreign investment, to boost the mining sector. It aims to increase mining’s share of GDP from less than 1 per cent to more than 2 per cent, and relevant downstream industries from 5 per cent to 20 per cent over the coming decade.
Iran’s mining sector remains underdeveloped, yet the country is one of the important mineral owners in the world. Iran holds 7 per cent of the total world’s minerals and proven reserves of metallic and non-metallic deposits estimated at 55 billion tons.
In addition, according to the US Geological Survey, Iran holds the world's largest zinc reserves, the second-largest copper reserves, 12th largest iron ore and 10th largest uranium with significant reserves of other minerals such as, lead, chromate, manganese coal and gold.
Iran's Constitution and Mining Code regulate the mining sector. The state-owned holding company Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) is in charge of mining policy and its implementation including development and royalty fees. IMDIRO’s main responsibility is to steer the development of the mining industries sector and convert its resources and products to sustainable wealth for the country. IMIDRO has 8 major companies and 55 operational subsidiaries active in steel, aluminium, copper, cement and mineral exploitation fields.
So far IMIDRO has completed 69 projects (in mining, steel, zinc, copper, aluminium, gold, coal, infrastructure and more) worth a total of US$17billion. IMIDRO has welcomed foreign investors and technology providers to complete over $29 billion investment projects, $9 billion of which are under implementation. To achieve the set vision and desired capacity, an estimated investment of $US40 billion is required. To encourage foreign investments, IMIDRO has set up initiatives such as providing right of exploitation of mines up to 25 years and some incentives such as tax exemptions and reduced import tariffs for equipment. Establishing more free investment zones is another policy followed by IMIDRO.
A mining special economic zone (SEZ) is under construction to serve the metal and mineral industries. 2 million tonnes of aluminium, 10 million tonnes of crude steel, 1 million tonnes of magnesium and 1.6 million tonnes of alumina are the major investment opportunities in this economic zone. New investments in graphite electrodes, titanium slag, and ilmenite concentrate, calcined petroleum coke, coal washing, aluminium alloy ingots, alumina from bauxite, iron-ore concentrate and pellets, alloy steel, hot-rolled steel and cold plate, magnesium lithium alloy, and coal powder are some key mid-stream opportunities in Iran.
Iran’s mineral potential remains largely undeveloped. Despite fluctuating world commodity prices, the Government sees mining as a significant industry that will generate foreign investment and export revenue.
To develop the mining industry, the following growth targets have been set:
- Exploring about 300,000 sq. km of new reserves
- Construction of over 25,000 km of new railway networks
- Transferring Oman Sea water to the central and north-eastern parts of Iran for mining industries
- Set up over 3.5 billion cubic metres per annum of desalinated water
- Establish new economic trade zones for mining-relevant industries such as Lamerd SEZ
- Increasing the crude steel nominal capacity from 24 million tonnes to 55 million tonnes, copper cathode from 0.255 million tonnes to 0.450 million tonnes, aluminium from 0.450 million tonnes to 1.5 million tonnes, phosphate from 2 million tonnes to 6 million tonnes, and nickel to 0.3 million tonnes.
Iran plans to support over 20,000 SMEs to establish downstream products of the metal and mineral sector over the long term.
At present, Iran produces 30 million tonnes of iron ore concentrate. According to Iran Outlook 2025, Iran is expected to produce 150 million tonnes of iron ore, 66 million tonnes of concentrates, and 83 million tonnes of iron ore pellets.
The country plans to convert the Sangan iron ore mine into a hub for the production of 17.5 million tonnes of iron ore concentrate and 15 million tonnes of pellets to feed local crude steel manufacturers.
Tariffs, Policy, regulations and customs
- The Iranian government has implemented a major reform of its indirect subsidy system on key staples such as petroleum products, water, electricity and bread. This has resulted in a moderate improvement in the efficiency of expenditure and economic activities.
- Iranian authorities have adopted a comprehensive strategy covering market-based reforms as reflected in the government’s 20-year Outlook document.
- Iran has Concluded Agreement on Avoidance of Double Taxation with 25 countries across the world.
- The Iranian National Tax Administration (INTA) has set the rate of value-added tax (VAT) at 9 per cent, including 6 per cent towards taxes and 3 per cent towards municipal charges.
Please refer to Iran customs websites for a detailed breakdown of tariffs and import restrictions.
Iran Customs Administrations (www.irica.gov.ir)
Marketing your products and services
Australian products and services including consultancy services, contracting, technology transfer and materials are used in the region. Providers of specialised services need to bid for projects, therefore a local presence is recommended.
The bulk of materials in the region are imported through Dubai. Major importers have significant warehousing facilities and well-developed distribution networks and branches in UAE which is being used as a hub.
Iran has a strong manufacturing base and well developed relationships with suppliers in India and China.
Australian companies compete best when they have a value-added product with a distinct competitive advantage. In Iran like most MENA countries there is a strong focus on forming relationships to do business. For this reason, in order to succeed, companies need the commitment and resources to make a number of visits to maintain relationships with their partners or establish an office.
Links and industry contacts
Government Departments and Business
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