What is the prospect of Iranian stone market after the signing of the comprehensive cooperation agreement with China for 25 years?

Recently, China and Iran officially signed a 25 year comprehensive cooperation agreement, including economic cooperation.

Iran is located in the heart of Western Asia, adjacent to the Persian Gulf in the South and the Caspian Sea in the north. Its important geo strategic position, rich oil and gas resources and historical, religious and cultural heritage determine its important power status in the Middle East and the Gulf region.
Iran has four distinct seasons. The north is cooler in summer and colder in winter, while the south is hot in summer and warm in winter. The highest temperature in Teheran is in July, and the average minimum and maximum temperatures are 22 ℃ and 37 ℃ respectively; the minimum temperature is in January, and the average minimum and maximum temperatures are 3 ℃ and 7 ℃ respectively.

According to the geological exploration and development organization of Iran, at present, Iran has proven 68 kinds of minerals, with proven reserves of 37 billion tons, accounting for 7% of the world’s total reserves, ranking 15th in the world, and has potential mineral reserves of more than 57 billion tons. Among the proven minerals, the reserves of zinc ore are 230 million tons, ranking first in the world; the reserves of copper ore are 2.6 billion tons, accounting for about 4% of the total reserves in the world, ranking third in the world; and the reserves of iron ore are 4.7 billion tons, ranking tenth in the world. Other proven major mineral products include: Limestone (7.2 billion tons), decorative stone (3 billion tons), building stone (3.8 billion tons), feldspar (1 million tons), and perlite (17.5 million tons). Among them, copper, zinc and chromite are all rich ores with high mining value, with grades as high as 8%, 12% and 45% respectively. In addition, Iran also has some mineral reserves such as gold, cobalt, strontium, molybdenum, boron, kaolin, mottle, fluorine, dolomite, mica, diatomite and barite.

In accordance with the fifth development plan and vision of 2025, the Iranian government has vigorously promoted the further development of the construction industry through privatization projects to ensure sustainable development. Therefore, it will drive the strong demand for stone, stone tools and all kinds of building materials. At present, it has about 2000 stone processing plants and a large number of mines. In addition, many domestic and foreign companies are engaged in the trade of stone machinery and equipment. As a result, the total employment of Iran’s stone industry is estimated to reach 100000, which shows the important role of the stone industry in Iran’s economy.

Isfahan Province, located in the central part of Iran, is the most important stone mineral and processing base in Iran. According to statistics, there are 1650 stone processing plants only around the capital city of Isfahan. In recent years, more and more Iranian stone enterprises are committed to developing stone deep processing production lines, so the demand for stone mining and processing machinery and tools increases rapidly. As the most important stone mining and processing base in Iran, Isfahan has a more concentrated demand for stone machinery and tools

Analysis of stone market in Iran
In terms of stone, Iran is a well-known stone country, with the output of various decorative stones reaching 10 million tons, ranking third in the world. In 2003, a total of 81.4 million tons of decorative stones were mined in the world. Among them, Iran produced 10 million tons of decorative stones, which is the world’s largest producer of decorative stones after China and India. Iran’s stone resources have considerable strength in the world. There are more than 5000 stone processing plants, 1200 mines and more than 900 mines in Iran

As far as Iran’s stone resources are concerned, only 25% of them have been developed, and 75% of them have not yet been developed. According to Iran Stone magazine, there are about 1000 stone mines and more than 5000 stone processing factories in Iran. There are more than 500 stone mines under mining, with a mining capacity of 9 million tons. Although great innovation has taken place in the stone processing industry since 1990, many factories in Iran lack advanced processing equipment and are still using old equipment. In recent years, these factories are gradually upgrading their own equipment, and about 100 processing plants invest 200 million US dollars to upgrade their own processing equipment every year. Iran imports a large number of stone processing equipment from abroad every year, and only buys equipment from Italy for about 24 million euro every year. China’s stone industry is well-known in the world. Iran is a good opportunity for China’s stone enterprises to explore the international market.
Mining management and policy in Iran
Iran’s industry and mining industry is under the jurisdiction of the Ministry of industry, mining and trade. Its subordinate organizations and large state-owned companies include: Industrial Development and revitalization Organization (Idro), mineral and mining development and revitalization Organization (imidro), small and medium enterprises and industrial parks Organization (isipo), Trade Promotion Center (TPO), international exhibition company, industrial, mining and Agricultural Chamber of Commerce (ICCIM), national Copper Corporation and National Aluminum Corporation Company, Mubarak steel works, Iran automotive industry group, Iran Industrial Park Company and Iran tobacco company, etc.
[investment criteria] according to the law of Iran on the encouragement and protection of foreign investment, the access of foreign capital for construction and production activities in industry, mining, agriculture and service industries must meet the requirements of other current laws and regulations of Iran, and meet the following conditions:
(1) It is conducive to economic growth, technology development, product quality improvement, employment opportunities, export growth and international market development.
(2) It shall not endanger national security and public interests, destroy the ecological environment, disrupt the national economy or hinder the development of domestic investment industries.
(3) The government does not grant foreign investors the franchise, which will make foreign investors monopolize domestic investors.
(4) The proportion of the value of productive services and products provided by foreign capital shall not exceed 25% of the value of productive services and products provided by domestic economic departments and 35% of the value of productive services and products provided by domestic industries when foreign capital obtains investment license.
[prohibited areas] Iran’s law on the encouragement and protection of foreign investment does not allow the ownership of any kind and quantity of land in the name of foreign investors.

An analysis of Iran’s investment environment
Favorable factors:
1. The investment environment tends to be open. In recent years, the Iranian government has actively promoted privatization reform, developed its own oil and gas industry and other industries, devoted itself to the recovery and revitalization of the national economy, gradually implemented a moderate opening-up policy, vigorously attracted foreign investment and introduced foreign advanced technology and equipment.
2. Rich mineral resources and obvious geographical advantages. Iran has huge reserves and rich types of mineral resources, but its mining capacity is relatively backward. The government actively encourages foreign-funded enterprises to participate in exploration and development, and the mining industry has a good momentum of development.
3. The economic and trade relations between China and Iran are constantly expanding. The growing economic and trade relations between the two countries have laid a solid foundation for mining investment and development.
Adverse factors:
1. The legal environment is special. After the victory of the Islamic revolution in Iran, the original laws were revised to a great extent, with a strong religious color. The interpretation of laws varies from person to person, not in line with international standards, and often changes.
2. The supply and demand of labor force do not match. In recent years, the quality of Iran’s labor force has improved significantly, and labor resources are abundant, but high unemployment is a major problem.
3. Choose a suitable investment location and objectively analyze the preferential policies. In order to attract foreign investment, the Iranian government has revised and promulgated a new “law on the encouragement and protection of foreign investment”. According to the law, foreign capital’s shares in Iran’s investment are unlimited, up to 100%.

Post time: Apr-07-2021

Newsletter Stay tuned for Updates

WhatsApp Online Chat !