Looking at the media we could be excused for assuming that the Iranian economy must have ground to an absolute halt these last two weeks as we repeatedly see footage of huge numbers of opposition supporters thronging the streets of the capital Tehran in massed rallies. But in fact the economy is doing relatively well considering the oil price has halved and the country is struggling under the UN and US imposed sanctions applied following it’s defiance over halting their nuclear enrichment program. As the world’s fifth largest oil exporter, Iran’s economy is very reliant on the price and demand for oil and although the embattled conservative leader Mahmoud Ahmadinejad claims the economy is doing well with 5-6% growth the reality is it is probably approaching zero according to the IMF reported in Reuters. Still even zero is not as bad as many western economies but inflation is running at about 18%, down from nearly 30% last October and unemployment is high, both of which are contributing factors in the current unrest.
That said investment in and production by the metals sector is still expanding. The Esfahan Steel company is reported in the Tehran Times to be close to commissioning its new 1.4m ton blast furnace which will boost annual production to 3.6m tons. In addition the company is close to completing a new 900,000 ton coke production plant and a 2.4m ton pelletizing plant. By the summer Iran should become self sufficient in steel. Copper production has also been rising fast. Concentrates have increased by 72% since the middle of this decade and cathode by 28% according to Iran mining. Iran is rich in mineral assets but is held back from efficient exploitation largely by government control over resources. The mines at Sar Cheshmeh in Kerman Province contain the world’s second largest lode of copper ore, some 5% of the world’s total. The country has sufficient iron ore to last them 100 years.
Iran’s current status as something of a pariah state means its consumption and production are of limited interest to many western producers or consumers but should the unthinkable happen and the current turmoil lead to Iran returning to the more normal relations with the wider world, the country’s metals industry could become a significant player, particularly in the supply of primary metals.