Iraq eyes industrial mineral prospects as it diversifies away from oil

By Liz Gyekye
Published: Monday, 27 April 2015

Government encourages foreign investment; Iraq plans to establish new mineral council.

Delegates at the Middle East Mining (Manajim) Conference 2015 in London heard how countries like Iraq are trying to diversify their economies away from oil and gas and focus more on developing their industrial minerals sectors. 

Iraq hosts a wide range of mineral deposits dispersed throughout the country and can provide opportunities for foreign investment, according to Government of Iraq’s former first deputy president of parliament, Dr Qusay Al Suhail.

Speaking at the Manajim Conference at the end of April, Al Suhail said Iraq had more than 900m tonnes of sulphur. It also has silica sand, phosphorous, bentonite, feldspar, kaolin, gypsum and flint clay.

Dr Saad Jasim, consultant to Heritage Oil and author of The Geology of Iraq, added that western Iraq had large deposits of low-grade iron and bauxite as well as zircon and ilmenite concentrations in black sand.

He explained that the political situation in Kurdistan, an autonomous geo-cultural region spanning northern Iraq, Syria, Turkey and Iran, is favourable for exploration at the moment. 

However, Al Suhail said that the central government controls investment in industrial minerals, which can stunt the sector’s development. He said: "The main problem of Iraq is that we have one law controlling investment, which was issued in 1988. This law shows that the investment in such materials is [handled] separately under the central government."

Nevertheless, he said that the Iraq government was currently drafting a new mineral investment law. He said the main purpose of the law was to establish a "mineral council" similar to its "oil council", which will help with the planning of mineral resource investment, as well as "giving licences to companies who would like to come to Iraq".

With oil and gas prices becoming increasingly volatile, Middle East countries such as Saudi Arabia, Oman and Iraq are trying to diversify their economies away from those markets.

Civil unrest

Speakers giving presentations at the Manajim Conference did not mention how the recent Iraq war (2003-2011) has affected mining development in the country, or how Islamic State of Iraq and the Levant (ISIL), the extreme jihadi rebel group, was deterring investment.

Last year, IM reported that ISIL was disrupting operations by taking control of a phosphate-rich area called Akashat. Located in the western region of Iraq, close to the Syrian border, Akashat has been mined for phosphate since 1982 and contains reserves of 430m tonnes.

According to the Iraqi Ministry of Human Rights, ISIL had been transferring raw material of phosphate to Raqqa in Syria.

The deposit is the main source of phosphate fertiliser in Iraq, and Saudi Arabian news source Al Arabiya speculated that the material could be used in the production of explosives.