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Iran has signed a US$1bn deal with private investors to develop Mehdiabad, one of the world’s largest zinc mines, which it expects to come on stream in the next four years and produce 800,000 tonnes of zinc concentrate per year
The state-owned Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO) said that it has signed the deal with a consortium of six private companies, led by Iran’s Mobin Mining and Construction Company.
According to Reuters, Mehdiabad has zinc ore grades of between two to four per cent, meaning 800,000 tonnes of zinc concentrate a year would add between 16,000 to 32,000 tonnes of refined zinc to the 13.7mn tonnes per year global market.
IMIDRO, a state-owned mines and metals holding company, said Mobin Mining and Construction Company has been talking to international mining firms in Switzerland and Spain about joint ventures to develop the Mehdiabad mine, located in Iran’s Yazd Province.
Iran has struggled to lure foreign investors since it signed a deal in 2015 with six world powers to curb its nuclear programme in return for the lifting of international sanctions against it.
“Mehdiabad is only significant if they get it off the ground. Iran needs foreign help and even then, to get an idea of what this means you need an idea of what the metal content in that concentrate is,” said Citi analyst David Wilson.
Mehdiabad, zinc, lead and silver deposit, has 154mn tonnes of proven reserves, according to IMIDRO, which expects the reserves to reach up to 700mn tonnes once exploration is completed.
The private consortium will run the mine for 25 years, though their contract could be extended.
On top of the targeted 800,000 tonnes of zinc concentrate, Mehdiabad is also expected to produce 80,000 tonnes of lead and silver concentrate a year, IMIDRO said.