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Industry and Mining from U.S. Central Intelligence Agency map of Iran 1978.

Iran’s mining industry is under-developed. Yet the country is one of the most important mineral producers in the world holding some 68 types of minerals, 37 billion tons of proven reserves and more than 57 billion tons of potential reservoirs.[1] Mineral production contributes only 0.6 per cent to the country’s GDP. Add other mining-related industries and this figure increases to just four per cent (2005). Many factors have contributed to this, namely lack of suitable infrastructure, legal barriers, exploration difficulties, and government control over all resources.

The most important mines include coal, metallic minerals, sand and gravel, chemical minerals, salt, etc. Khorasan has the most operating mines.

Although the petroleum industry provides the majority of economic revenues, about 75 percent of all mining sector employees work in mines producing minerals other than oil and natural gas. These include coal, iron ore, copper, lead, zinc, chromium,barite, salt, gypsum, molybdenum, strontium, silica, uranium, and gold (most as a coproduct of the Sar Cheshmeh copper complex operations). The mines at Sar Cheshmeh in Kerman Province contain the world's second largest lode of copper ore (5% of the world's total). Some 128,500 tons were extracted in 2000–2001. Large iron ore deposits lie in central Iran, near Bafq, Yazd, and Kerman.

Iran also produced orpiment and realgar arsenic concentrates, silver, asbestos, borax, hydraulic cement, clays (bentonite, industrial, and kaolin), diatomite, feldspar, fluorspar, turquoise, industrial or glass sand (quartzite and silica), lime, magnesite, nitrogen (of ammonia and urea), perlite, natural ocher and iron oxide mineral pigments, pumice and related volcanic materials, caustic soda, stone (including granite, marble, travertine, dolomite, and limestone), celestite, natural sulfates (aluminum potassium sulfate and sodium sulfate), and talc. Iran also may have produced ferromanganese, ferromolybdenum, nepheline syenite, phosphate rock, selenium, shell, vermiculite, and zeolite, and had the capacity to mine onyx.

Contents

[edit] Mineral production

In 2005, of 3125 operating mines, 2747 and 378 mines were run by private and public sectors respectively.[2] There are 5,019 mines which are active, inactive or in the state of being equipped and the rate of extraction from these mines stood at 217.5 million tons last year. More than 96,000 people are presently engaged in the mines sector (2008). The number of operating mining units stands at 17,000.[1]

Close to 30 percent of the country’s investment has been made in the field in recent years. 45 percent of the stock market's capitalization is in the mineral industries. The sector also accounts for 3% percent of the country’s exports. In 2008 the share of the mining sector and mineral industries increased to over five percent in GDP, providing 3 percent of the country’s employment.[3] In the first quarter of 2009-2010, Iran exported close to 5.6 million tons of mineral products worth over $1.2 billion.[4]

Exploration projects implemented by the National Geology and Mineral Exploration Organization in the past three years are six times higher than the figure for the same period during the previous government.[5]

Based on a short-term program (2008), gold production will reach five tons per year. Under the long-term plan, the figure will rise to 25 tons per annum. Meydouk in Shahr-e Babak (Kerman province), Khorapeh in Piranshahr (West Azarbaijan), Nabijan in Kalaybar and Alikh in Jolfa (both in East Azarbaijan province), Logheh (Zanjan province) and Qolqoleh (Kurdestan province) as the gold-rich regions. Saqqez and Piranshahr in the west as well as Maherabad and Sheikhabad in east are also main gold-rich regions of Iran.[6]

Since 2005, mortality rate in mining mishaps has declined to one death for every 10 million tons of mining production from the previous figure of six million tons.[7]

Iran has recoverable coal reserves of nearly 1.9bn short tonnes. By mid-2008, the country produced about 1.3m short tonnes of coal annually and consumed about 1.5m short tonnes, making it a small net importer of coal.[8] Iran plans to increase hard-coal production to 5 million tons in 2012 from 2 million tons in November 2008.[9]

[edit] Metal production

Main steel mills are located in Esfahan and Khuzestan. Steel is produced in Mobarakeh Steel Mill, Isfahan Foundry, Khuzestan Steel Company (with new capacity of 80,000 tons),[1] Azerbaijan Steel Company, Iran Steel Alloy Company, Iran National Steel Industries Group, Ahvaz Pipe and Rolling Company and Khorasan Steel Company.[10] [11] Steel production capacity will reach 17 million tons from 10 million tons in 2009 after the private and state projects come on stream and 40 million tons in 2012.[12]. Iran became self-sufficient in steel production in 2009.[13] In 2008 Iran produced 7.5 million tons of direct reduced iron (DRI). It produces 13 percent of global DRI production and 41 percent of total Middle East DRI production.[1]

Aluminum and copper production are projected to hit 245,000 and 383,000 tons respectively by March 2009.[12][14]

In 2009 Iran will produce 12.1 million tons of steel, 210,000 tons of copper, 350,000 tons of aluminum (457,000 tons in 2010), 25.5 million tons of iron ore, 1.7 million tons of coke concentrate and 230,000 tons of alumina.[15] The largest plants for aluminum production in Iran are Iralco, Almahdi, and the newly built Hormozal aluminum smelter plant in Bandar Abbas.[16]

[edit] Foreign Investments

The government owns 90 per cent of all mines and related large industries in Iran and is seeking foreign investment for the development of the mining sector. In the steel and copper sectors alone, the government is seeking to raise around US$1.1 billion in foreign financing.

In the early 1990s the buy-back method of transaction (the government buys back the industrial project after the foreign direct investor has recouped his initial investment in the project plus a predefined profit) was introduced to bypass constitutional constraints on foreign investment and avoid potential political difficulties within the country. The scheme has government support for being an efficient means of attracting foreign capital, services and technical expertise, while reducing foreign exchange expenditures and expanding exports. If the Iranian Government is to fulfil its 20-year plan to improve the country’s mining sector, it’s estimated that US$20 billion, mostly in foreign investment, will be required.

  • Projects eligible for buy-back agreements and foreign loan facilities are:
Projects that complete aluminium metal production lines
Projects that mobilise coal, iron ore, steel, copper and pigment metals production
Ferro alloys projects and gold production
  • Iran imports the following equipment to support its mining sector:
Mining equipment such as drills, loaders and shovels
Support equipment such as bulldozers, graders, trucks and auxiliaries
Utility equipment such as compressed air plant equipment, water and waste-water treatment equipment
Mechanical equipment including equipment for crude ore handling, grinding, separation and treatment purposes
Laboratory and workshop equipment
Power supply and distribution equipment
Process control instruments

Most of the electrical distribution equipment for water supply and treatment utilities, along with steelworks and storage facilities are manufactured locally. There is a demand for high quality second-hand machinery in Iran. To date, doing business in Iran has had political overtones[citation needed]. In this regard, countries which can maintain a neutral and impartial political image in the Middle East are advantaged.

[edit] See also

[edit] References

  1. ^ a b c d http://www.iran-daily.com/1387/3267/html/economy.htm
  2. ^ Supreme Audit Court - Official Website
  3. ^ [1]
  4. ^ http://www.iran-daily.com/1388/3476/html/economy.htm
  5. ^ http://www.iran-daily.com/1387/3290/html/economy.htm
  6. ^ http://www.iran-daily.com/1387/3266/html/economy.htm
  7. ^ http://www.iran-daily.com/1387/3281/html/economy.htm
  8. ^ "Market Profile for Iran", Energy and Electricity Forecast, Economist Intelligence Unit, 18 June 2008 
  9. ^ http://www.bloomberg.com/apps/news?pid=20601104&sid=a1rzkB_rOKok
  10. ^ http://www.iran-daily.com/1388/3426/html/economy.htm
  11. ^ Iran Daily: Steel Output up Retrieved June 20, 2009
  12. ^ a b Iran Plans to Produce 250,000 Tons of Copper in Year to March retrieved November 28, 2008
  13. ^ Iran daily: Steel Self-sufficiency Retrieved June 20, 2009
  14. ^ IRNA:Iran: $30 Billion Dollar to be invested in industry Retrieved November 15, 2008
  15. ^ http://www.iran-daily.com/1388/3482/html/economy.htm#s400458
  16. ^ http://www.presstv.com/detail.aspx?id=109468&sectionid=351020102

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