Iran is keen to attract external business partners to invest
in local mining companies, exploration projects and pursue
business opportunities within the country, delegates heard at
the Global Mining Finance conference held in London in
After a full decade of inte-rnational investors being absent
from the Iranian economic environment, the lifting of trade
barriers is creating opportunities to exploit the large local
mineral resources, according to Farzad Moshfeghi, founder of
UK-based financial consulting company Finity Asset.
"Exploring or investing in Iran has become easier and simpler
than in other countries," Moshfeghi told attendees in London.
There are over 5,000 operational mines in Iran at present,
extracting 12 metals and 36 non-metal ores. Metallurgical and
non-metallurgical deposits are estimated at a total 55bn
Additionally, the country’s large territory
holds reserves in 68 types of minerals, worth an estimated
The majority of operational mines (about 90% of the total)
are owned by the government, mainly through state-owned
companies. State-controlled IMIDRO is the largest, with a big
portfolio of mining projects.
"Most of the mines are state-owned, but the government is
actively looking for investors," Moshfeghi said.
"There are mines in Iran that are commercial. Many of these
mines will need technology [updates]," he told IM.
This confirms what IM heard at the 23rd IM Congress in Prague
this summer, when Iranian speakers highlighted the need to
improve processing technology at domestic mining facilities,
to achieve better efficiency and quality of mining output.
Moshfeghi acknowledged that despite the lifting of trade
restrictions, a number of other limitations on financial
operations remain in place, and it is unclear when these will
be phased out. Operating in US dollars remains difficult, for
example, as is business between Iranian and foreign banks.
As an exhibitor at ceramics trade show Tecnargilla told IM
in September: "Western banks still don’t operate
with Iranian banks. We hope it gets better but, for the moment,
it’s impossible [for us] to do business there"(see
Moshfeghi stated that it will be political factors such as
the outcome of the approaching presidential elections in Iran
and the US that will determine whether the process will
At the same time, he told IM: "People and businesses are
expecting change, and I don’t expect this
process to [be derailed]."
Moshfeghi stated there is an opportunity for Iran to enter
the international minerals market with a view to balance out
China’s quasi-monopoly on some mineral
He named dolomite as one of these. Iran holds large deposits
of the refractory mineral, of which China controls about 80% of
Dolomite was listed by the European authorities as one of
the so-called 'critical minerals’ of which Europe
would need to ensure stability of supply in the coming
"Iran can definitely play a role in dolomite exports," he
Besides dolomite, he named rare earths, bauxite, lithium and
chromite as other noteworthy industrial minerals that investors
should look into.
Public opinion 'moving against
- Will to monitor capital flows
- Worsened public perception
- Investors urged to play safe
Investors with a view to funding mining projects now have to
face an environment of widespread scepticism against private
capital, delegates heard at the Global Mining Finance Autumn
Financial investments and financial instruments such as
funds and offshore jurisdictions have come under close scrutiny
by the public and political authorities, which has led to
stricter regulations on transparency and information
disclosure, Ashley King-Christopher, partner at
UK-headquartered law firm Charles Russell Speechlys LLP, told
"The public opinion is moving against private capital," he
said, citing recent media cases such as the Panama Papers (an
archive of leaked documents published by international media
outlets disclosing a long list of holders of offshore companies
based in Panama) as having negatively influenced the perception
of financial capital in the eyes of the western public.
Additionally, countries that were historically tight-lipped
about the information they held about companies operating
through their systems – such as Switzerland –
are beginning to open up to the concept of information sharing
with other nations, on the back of political pressure to clamp
down on tax evasion and tax avoidance.
These factors have converged to create a situation in which
investors are increasingly concerned about the financial
instruments they use to carry out their business and have to
plan their steps when working across jurisdictions on mining
"All of this is about perception. Companies need to have
this in mind from planning stage so that their operation
– and their image – is not tarnished,"
This growing uncertainty has resulted in slower movement of
capital, he said: "The current scenario is not favourable for
private capital to get out. Investors are pressured into
sitting on it without moving it."
Amid this rapidly-changing outlook, the jurisdictions where
investors base their work and the legal systems they can resort
to are crucial to ensure business continuity.
King-Christopher urged investors to keep their financial
structures in OECD jurisdictions "whenever possible", as OECD
regulations provide a clear framework in which to operate. He
added that investors should also make sure they remain tied
to the British legal when working on projects in developing
Commenting on the possible consequences of Brexit,
King-Christopher predicts that private capital should not be
affected even in a future scenario when the UK is no longer
part of the European Union.
"Private capital doesn’t care about EU passport
laws," he said.