Gold price rebounds 2% as Goldman reiterates $3,000 target
Bullion has declined about 7% from a record last month, with losses accelerating after Trump’s victory.
Sarcheshmeh copper complex, operated by the National Iranian Copper Industries. (Image courtesy of NICICO)
Iran’s full-re-entry into the world energy market upon the lifting of sanctions has hurt oil prices further, sending them below the psychologically significant $30-a-barrel level last week.
The question in everyone’s mind now is how Iran’s incursion into the mining industry will affect an already struggling sector, hit by a sustained rout in commodity prices.
Investor took renewed interest on the subject Monday, as Iran’s Deputy Industry, Mine and Trade Minister, Mehdi Karbasian, said his country hopes to finalize investment plans worth about $5.4 billion during President Hassan Rouhani visit to Italy, where he arrived Monday, on the first leg of a landmark visit to Europe.
The potential deals, Tasnim News Agency reports, include joint investments in the steel production chain in southern Iran, in an area stretching from Chabahar on the Gulf of Oman to Bandar Abbas and Jask in the Persian Gulf.
Karbasian is also expected to ink a contract with Italian and Chinese firms to carry out the second phase of Salco, Iran’s largest aluminum smelter plant, Trend News Agency reports (subs. required).
Karbasian is also expected to ink a contract with Italian and Chinese firms to carry out the second phase of Salco, Iran’s largest aluminum smelter plant.
The minister said another memorandum of understanding has been worked out with a French company for downstream aluminum projects, which the parties plan to finalize during Rouhani’s visit to Paris.
Italian firms are interested in aluminum and steel projects, while French companies seek also technical cooperation, Karbasian has said in the past.
Japan’s leading steelmakers are also said to be eying Iran’s mining potential, especially its titanium projects.
Tehran is opening $29 billion of mining projects to foreign investors, roughly equal the oil and gas investments up for grabs.
Last year, the mines ministry announced the discovery of two large coal and iron ore deposits in the Lut desert, in central Iran, which is already the number four supplier of iron ore to China.
According to official data, Iran ships some 15–20 million tonnes of iron ore a year, though that figure would have fallen substantially given the slide in the price and the high cost of mining inside the country.
Currently, the nation has more than 3,000 active mines, mostly privately owned, which focus on copper, iron ore and heavy rare earth elements.
Click here for photo essay of Iranian coalminers by Yunes Khani for Mehr.
9 Comments
Krusty1234
Aided and abetted by the complete public castigation of North American mining. Why not? What’s another nail in the coffin? The world shows little regard for ethical oil. Why would it show any regard for ethical mining?
Gary
here have a tissue @Krusty1234:disqus 🙂
Jean
Are you sure about this French company named Fiault? I can not find any company with that name operating in downstream project.
MINING.com Editors
That is what Trend news agency reported: http://en.trend.az/iran/business/2485075.html
patentbs
I will not knowingly put a nickel in Iran. Why would anyone put a collective $29B in a stink hole like that when you can get screwed in a democracy loving nation like Greece? There is little likely hood of the high potential returns ever being realized. — I’m out!
RSP2022
Iranians like rest of ME nations are not business savvy to stop the export of raw mining of their minerals. Just like others in the region, they will lose a lot of money in 100 times worth of the minerals.
They should ban the export of raw minerals unless those minerals are converted into the value added finished products that goes directly to retail markets and customers as close as possible. Example: Raw Marble of one ton rock was exported as $5. After refinement into finished tiles and other finished products in Western countries, the same One Ton was imported with priced at $356,000 in the form of the finished products. Same tiles are sold to the country for one tile at $2.60 per tile of 12 inch by 12 inch. Just look at the math, who got the real money.
This is true for rare earth metals where the finished products is old in 100,000 times of the raw mineral. Of course, the industry requires resources, skill sets and development investment in Iran. Though, that can achieved in four years in almost all the industries. In this case, the Import will bring in trillions and not billions for Iran. Hope they will be wiser than before the 1979 revolution. Otherwise, they will get Peanuts compared to the real Value Added products that will ultimately full employment of their young generation and millions of others from the other countries. Iranians need to manage better to really enjoy the benefits.
Nordbird
Assembling a car or computer is typically a 10% value added activity. Manufacturing the parts for assembly is another story, and you need ISO 9000+ and Six Sigma+ quality to even qualify as a supplier.
Even the Russians use Cummins or Caterpillar engines in their mining equipment, since nobody is crazy enough to buy equipment with Russian engines.
Mining is a 100% value added activity, since you are taking worthless rock and transforming it into a valuable commodity.
This basically means that you need a balanced economy that can produce, consume, and export to pay for imports.
Turning oil and metal into iPhones might sound like a brilliant idea, but there are other countries that can do the job far better, and nobody is crazy enough to buy an Iranian designed and built iPhone.
In the meantime, you have to work with what you have, diversify as much as possible, and not pontificate in ivory towers over what might be ideal with no concern for basic economics.
patentbs
Good perspective re value added! To be successful a nation MUST have a system in place to regulate, engage, and support industry and commerce. There also must be a grievance process (legal system) that is reliable and fair. So far that is not Iran. To attract investment, as things are now, they must be able to offer a HUGE return on investment that will offset the risk. I’m still out!
chekul
Iam heading to Iran