JOHANNESBURG (miningweekly.com) – The re-imposition of US sanctions on Iran will have only a limited impact on the country’s mining and metals industry in the short term and is expected to do “little additional damage to an industry already crippled by a myriad of domestic operational challenges”.
This is according to BMI Research, which states that foreign investors are already steering clear of the country’s mining and metals industry, owing to inefficient bureaucracy, inadequate infrastructure and corruption. The sector is also consolidated and consists primary of domestic and State-owned miners, which will continue to limit new miners from entering the market.
However, European and Asian investors have shown interest in mining projects in Iran, but BMI notes that should more signatories follow in President Donald Trump’s footsteps and withdraw from the Joint Comprehensive Plan of Action (JCPOA), the country’s economic growth will suffer, resulting in less domestic demand for metals and ores.
Domestic construction and infrastructure developments are a key driver of demand for iron-ore and industrial metals.
BMI is forecasting short-term growth of between 5% and 6% for the Iran mining industry.
The JCPOA is also known as the Iran nuclear deal. Trump announced on May 8 that the US will withdraw from the plan and that it will discontinue waivers for sanctions on the country. The first batch of sanctions, targeting the automotive industry among others, is scheduled to be re-imposed in August, followed by a second batch, which includes the oil sector, in November.