Ali Amraei, CEO of SSMIC: One of the most critical areas of economic competition in the world is the mining sector. Today, leading economic countries have utilized mining as an economic driving force, contributing significantly to their development and GDP. Iran, being rich in the type and number of mineral resources, can leverage combined and simultaneous methods to use the mining sector as a lever for its economic growth and comprehensive development.

The current world is more than ever an arena of economic and industrial competition. Global economic powers, by employing various tools and activating their available potentials, aim to increase their GDP. One of the most significant potentials is the mining and mineral industries sector, which is the first link in the industrial production chain.

If oil was considered an area of economic competition a few decades ago, today the industry, particularly steel, is regarded as an important indicator in this regard. One of the crucial elements of development in the world is the production and consumption of steel and other products such as copper, which are considered strategic commodities. Naturally, developed countries seek to create a balance at the beginning and end of the chain.

Obviously, the development of mining activities, including exploration, extraction, and processing, serves as an economic engine, as it directly impacts various industries like military, aerospace, aircraft manufacturing, shipbuilding, construction, and even service and technology sectors. Countries like Australia, Brazil, the USA, Russia, China, and Canada possess the largest mineral reserves.

Iran, with 68 types of minerals and 7% of the world’s mineral reserves, is considered a mineral-rich region. With 37 billion tons of confirmed reserves of various mineral materials and approximately 57 million tons of potential reserves, the development of the mining sector can significantly increase its less than 3% share in the GDP. This figure, which represents the mining sector’s contribution to GDP, is 10% for Australia.

Although the Seventh Development Plan predicts a growth of 5.8% for the industrial sector and almost 13% for the mining sector, achieving such a goal requires specific conditions and prerequisites. Currently, Iran, compared to other countries with high mineral potential, suffers from weaknesses in infrastructure, energy shortages, international sanctions, and most importantly, a lack of a structured plan from exploration to extraction.

These weaknesses have resulted in the net production value of Iran’s mineral products being around 3.2 billion dollars, ranking it 21st globally. This figure for China, Australia, the USA, Indonesia, and Russia is reported to be 184 billion, 150, 93, 59, and 54.6 billion dollars, respectively. Saudi Arabia’s projected mining sector revenue for 2030 is about 75 billion dollars, a figure that will turn Saudi Arabia into a significant player in this sector, despite its mineral potential being much less than Iran’s.

China, as the world’s largest steelmaker, is the top consumer of iron ore globally, with the majority of its imports coming from Australia. Overall, China dominates the global mineral supply chain. This dominance gives China a significant role in determining iron ore prices in negotiations with suppliers. Moreover, China’s economic competition with the USA has led it to expand its mineral economy policies globally, making it the largest investor in the mining sector in Africa, particularly in Congo and Zimbabwe.

China’s mining economy development policy is not limited to iron ore but includes strategic metals such as copper, lithium, aluminum, cobalt, etc. Investments of 4.6 billion dollars in African lithium mines and owning over 70% of Congo’s cobalt mines indicate China’s ambitious and expansive development plans. Additionally, China has invested 5 billion dollars in Afghanistan’s Eynak copper mine to transport 6.8 billion cubic meters of copper ore to China.

China has also made substantial investments in Zimbabwe’s copper sector, continuing its industrial development strategy by extracting resources from underdeveloped countries. Meanwhile, Afghanistan, under Taliban rule, seeks greater investments in iron ore and steel mines, with reports indicating 500 million dollars of investment in this sector.

Canada, with numerous and rich mines, is another significant player, with mining companies attracting 6.8 billion dollars through the stock market in the first half of 2024.

Australia, with the world’s largest mineral reserves, has leveraged this potential to its economic advantage. The mining sector’s revenue, through precise planning, is invested in various areas like healthcare, education development, and infrastructure, leading to economic prosperity. Analyzing the investment attraction in Australia’s mining sector between 2018 and 2020, which was nearly 1,100 billion dollars, illustrates how the country has turned mining into an economic and welfare advantage for its citizens.

These examples highlight mining as a crucial component in increasing a country’s GDP. Beyond developing raw and semi-raw material exports, securing raw materials for industrial production chains and exporting them has proven to be a powerful lever for economic development.

Iran and the Labyrinth of the Mining Economy

Despite significant potential, Iran’s mining sector faces serious challenges, and addressing these issues can lead to further flourishing in this domain, although this high potential does not necessarily translate to economic impact. One of the most critical challenges in this sector is the lack of a comprehensive plan from exploration to extraction and processing. According to reports, the average exploratory expenditure worldwide is approximately 1 billion dollars, while this figure for Iran is less than ten percent of that amount.

While many key steel-producing countries and other industries have expanded their surface and deep explorations for years and use new methods and modern technology for deep extraction, our country has not been able to conduct significant deep explorations, and the current extractions are generally done at shallow depths. For example, a country like China conducts approximately 5 million cubic meters of drilling annually; this rate for Australia and Canada is 11 and more than 3.7 million cubic meters per year, respectively, whereas the total scope of explorations in Iran is 7.5 million cubic meters.

In terms of airborne geophysical surveys, Iran’s status compared to leading countries in this field is not satisfactory either. Australia’s and the USA’s airborne geophysics measurements are 34 and 20 million linear kilometers, respectively, while this rate for Iran over the past 50 years is 2 million kilometers. According to the vision document, producing 55 million tons of steel requires extracting 120 million tons of iron ore, which means accelerating mining operations is essential.

Serious issues in providing energy and transportation infrastructure, international sanctions, lack of access to modern world technologies and new mining machinery, problems in attracting foreign investment, and weaknesses in training specialized human resources are among other significant problems in the mining sector. The lack of a principled process for issuing exploration and exploitation licenses and the non-utilization of the private sector due to contradictory and cumbersome laws and regulations have caused us to overlook the enormous potential of the private sector for boosting the country’s industry and economy.

Implementing Article 44 of the Constitution to utilize the private sector’s potential in mining and related industries, while attracting investment and creating jobs, can greatly assist mining operations. Moving towards the production of high value-added products compared to their production costs can partially cover the foreign exchange income gap in this sector.

Producing high-quality alloy and ferroalloy products tailored to the needs of domestic and international markets and expanding the export of these products is an important issue that must be given special attention. The processing of materials, on average, creates ten times the value added of raw materials, and this rate in the steel sector can reach up to 64 times. Therefore, the importance of producing high value-added products is more crucial than ever for presence in international markets and competition with other countries.

Neglecting exploration in other mineral areas such as nickel, chromium, cobalt, lithium, aluminum, etc., has weakened the development of industries related to these elements in the country, while these elements fall into the category of high value-added minerals. If selling raw minerals or minimal processing can be a solution for Australia, for Iran, moving towards high value-added processed products seems more logical.

Eliminating redundant laws and solving lengthy administrative bureaucracy and creating transparency in issuing guidelines, which are sometimes contradictory, is an important issue that should be given special attention. Enhancing the ability to expand the scope of airborne and deep explorations and using modern geotechnical technologies to identify minerals at greater depths, financing to complete development projects, equipping fleets and machinery for mineral extraction and transportation, and strengthening infrastructure through foreign and domestic investment is indispensable.

Given Iran’s membership in the Shanghai Cooperation Organization and BRICS, the potential of member countries and the development of economic and political relations with the West through the expansion of economic-industrial diplomacy can be leveraged to attract investment, knowledge, and technology. Utilizing available advantages for the development of mining and related industries, such as leveraging accessible hydrogen resources for quality, high value-added productions, can be strategies to strengthen the mining sector.