Iran More than Oil: Iran Has Big Plans for Downstream and Mining after Sanctions End

Editor: Dominik Stephan

Iran plans to diversify its industry after the end of the international sanctions and embargos with bigs investments in mining, mid- and downstream projects. These plans however, are based on optimistic growth assumptions of an annual double digit growth within the next decade.

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Iran's oil exports worldwide by region in 2008 and 2014 (in 1,000 barrels per day)
Iran's oil exports worldwide by region in 2008 and 2014 (in 1,000 barrels per day)
(Source: Statista/Opec)

Iran's target is to increase the mining’s current GDP share from less than 1% to more than 2%, and relevant downstream industries from 5% to 20% within next ten years (2015-2025), market analysts and industry experts agree. These plans would require mining and relevant industries to grow at 10-12% per year.

“The boom in the mining sector will help the Iranian Government reduce the unemployment rate and raise non-oil revenues significantly. The Iran 2025 Outlook initiative calls for greater domestic value-adding activities with the aim to reduce the amount of raw minerals exported from the country. This programme is expected to require significant imported technology and participation of foreign partners,” said Ali Mirmohammad, Senior Consultant and Business Development Manager for Iran at market anlysts Frost & Sullivan.

In the post-sanction era, the country has charted a strategic 10-year plan to boost mining exports to US $ 6 billion from US $ 1.5 billion in 2015. These mainly include new reserves of raw materials whose processing in-country is not feasible. Furthermore, all manufacturing exports (excluding petrochemical products) are expected to increase from US $ 15 billion to US $ 60 billion by the end of 2025, if all barriers are lifted.

Country Plans to Attract 20 Billion Dollars

Iran intends to attract over US $ 20 billion of foreign investment in mining and downstream industries once the sanctions are lifted, said the Deputy Minister and Chairman of the Executive Board of Iranian Mines & Mining Industries Development & Renovation (IMIDRO), Mehdi Karbasian at the International Mining And Resources Conference (IMARC) Australia. IMIDRO is the state-owned holding mining company that governs and allocates budgets, makes policies and owns the largest strategic mining companies in Iran.

IMIDRO has welcomed foreign investors and technology providers to complete over US $ 29 billion investment projects, US $ 9 billion of which currently are under implementation. IMIDRO is strongly looking for new explorations up to nearly 300,000 square kilometers to supply required materials for downstream projects, said Salman Nasr, the International Relations officer of IMIDRO. Exploration of new reserves in copper and poly-metals, phosphate, nickel, raw material for aluminium production, iron ore and precious and semi-precious stones are key investment priorities in the country.

Sepecail Economic Zones in the Pipeline

“To encourage foreign investments, IMIDRO has set up initiatives such as providing right of exploitation of mines up to 25 years and some incentives like tax exemptions. Establishing more free investment zones is another policy, which is followed by IMIDRO,” Ali noted.

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Moreover, a mining Special Economic Zone is under construction to serve the metals and minerals industries. Two million tonnes of aluminium, 10 million tonnes of crude steel, one 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, aluminum alloy ingots, alumina from bauxite, iron-ore concentrate and pellet, alloy steel, hot-rolled steel and cold plate, magnesium lithium alloy, and coal powder are some key mid-stream opportunities in Iran.

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