Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
The government of US President-elect Donald Trump will have no significant impact on foreign investments into Iran’s mining sector, as any re-instatement of sanctions will, if at all, pose minimal additional hurdles to entrepreneurs, according to analysts.
In a note Monday, BMI researchers say they rather see other factors, such as domestic operational challenges and low mineral prices, preventing investors from tapping into Iran’s vast mineral wealth.
As soon as Iran re-entered the global economy early last year, the government opened up $29 billion of mining projects to foreign investors, roughly equal to the oil and gas investments up for grabs.
Since then, Tehran has approved $2bn worth of direct foreign investment for 29 industrial and mining projects. And just last week, it announced it planned to kick off ten new mining-related ventures by the end of September.
The projects, Iran Daily News reported, include a rare earth elements production unit, a phosphoric acid plant, a lead-zinc concentrate mill and the second phase of Zarshouran gold processing plant.
BMI analysts do warn that Trump’s antagonist rhetoric against Iran may cause a return to instability in the region and in the country itself over the next few years, posing downside risks to the development of its rising mining sector.
They also note that poor infrastructure, bureaucracy, a complex legal system and low mineral prices are the most likely challenges companies are expected to face there.
According to official figures, Iran stands to make an estimated $700 billion off its vast deposits of minerals such as copper, iron ore, zinc, lead and heavy rare earth elements.
Currently, the nation has more than 3,000 active mines, mostly privately owned.
4 Comments
Art Easian
Investors are not insane. I don’t get the ubiquitous Trump in this context. You are saying what?
MINING.com Editors
What the analysts I quote are saying is that even though Trump has threatened in recent days with restoring the sanctions against Iran, the chances of that actually happening are very remote. Investors usually follow the news and, as such, they may be thinking is not worth going to a place that soon will have sanctions reinstated. But BMI’s note argues that is safe, as the agreement completed in January 2016 removed almost all UN and EU sanctions, which Trump does not have the power to reinstate on his own.
US primary sanctions on Iran pertaining to US companies remain in place and will be so for the tenure of the Trump presidency. These include banning the use of the US dollar in transactions with Iran and stopping almost all US companies from doing business with Iran unless a waiver is g ranted. US secondary sanctions are the only actions available for Trump, provided he has support in Congress. These relate to restrictions on non-US companies that do business in Iran and the US.
Gary
Poor old Donald Trump. It won’t be long before Zika and other diseases affecting mankind will be blamed on him as well as earthquakes and volcanos. Why there is such a hatred for this man in general escapes me, maybe because he will be doing something right for a change?
Peter Adams
Agree with Gary. Stupidity combined with bitterness because spoiled brats did not get their way. Objectivity and facts combined with intelligent comment and analysis is what will earn respect. Should Trump really fault in the future and it is commented on, even the intelligent may make it off as just another bitter tirade.