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Will the lifting of sanctions benefit Iran's iron ore industry?

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27 September 2016

Will the lifting of sanctions benefit Iran's iron ore industry?

Report summary

We estimate average cash costs for Iranian iron ore concentrate exports of US$50.50/tonne (FOB vessel), which is approximately breakeven at 2016 prices. Our cost estimate is at the higher end of the Wood Mackenzie global cost curve primarily due to inefficient processes, high transport costs and a lack of water. We forecast Iranian concentrate exports to decline over the next few years as competition in the seaborne market intensifies. A lack of iron ore pellet capacity is a bottleneck for Iran. There are a large number of pellet plants in various stages of construction but a lack of funds has stalled their development. In order to expand capacity in its iron ore sector, Iran needs to attract foreign investment but, despite the lifting of sanctions, we think this will be a long and difficult process as investors tread cautiously in a highly risky market.

Table of contents

  • Executive Summary
    • Concentrate capacity
    • Pelletising capacity
    • Steel production capacity
    • Iron ore costs
      • Mining
      • Processing and pelletising
      • Transport
      • Royalties and duties
        • Iran iron ore on the global seaborne margin curve
        • The major producers
          • Chardormalu Mining & Industrial Company
          • Golgohar iron ore zone
          • IMIDRO's operations
          • Sangan Iron Ore Complex (SIOM)
        • The political environment
        • Government policy
          • Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO)
        • Conclusion
        • Iron ore and DRI capacity estimates

Tables and charts

This report includes 7 images and tables including:

  • Iran's iron ore mines
  • Iron ore exports from Iran and the Middle East
  • Estimated Iranian iron ore production costs
  • Will the lifting of sanctions benefit Iran's iron ore industry?: Table 2
  • Iran iron ore on the China breakeven cost curve
  • Will the lifting of sanctions benefit Iran's iron ore industry?: Image 4
  • Will the lifting of sanctions benefit Iran's iron ore industry?: Table 3

What's included

This report contains:

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    Will the lifting of sanctions benefit Iran's iron ore industry?

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