(Reuters) - The United States sanctioned 17 Iranian metals producers and mining companies on Friday but the impact to global supply would be minimal as the country is not a major producer, analysts say.
Treasury Secretary Steven Mnuchin said the sanctions, which are in addition to those imposed in May 2009, were as a result of Iran’s attack on U.S. troops in Iraq last week.
“Iran does produce small quantities of metals but it’s not really on a scale that is big enough to have an impact on metals prices,” said Capital Economics senior commodities analyst Caroline Bain.
“Iran is rich in reserves but they have struggled for years to get investment.”
Analysts at ING Bank said the new sanctions on Iranian metal exports initially boosted the market but “Iran’s supply in the global picture is fundamentally rather small.”
Companies covered under the fresh sanctions include Iran’s Aluminum Company, which the Treasury said accounts for 75% of the country’s output, Al Mahdi Aluminum Company Corp and National Iranian Copper Industries, among others.
In May last year, Washington imposed sanctions on Tehran targeting the metals and mining industries after the Islamic Republic said it would relax some restrictions on its nuclear program.
Iran has about 37 billion tonnes of proven mineral reserves and 57 billion tonnes of potential reserves, worth $800 billion according to 2014 data from an article posted on state-owned mines and metal holding company IMIDRO’s website.
Below are details of Iran’s main minerals, based on data from IMIDRO, unless otherwise stated.
Iran produced 31.5 million tonnes of iron ore concentrate between March and November 2019, a 4% rise year-on-year.
Iran is estimated to have around 2.7 billion tonnes of reserves. The Chadermalu, Golgohar and Sangan mines are considered the largest iron ore mines in the country.
In 2018, Iran was ranked 11th among global steel producers, according to World Steel Organization data, with output of 24.5 million tonnes. It exported 9.3 million tonnes of steel in 2018, making it the 16th biggest exporter, ahead of Spain and the United States.
Iran produced 13.7 million tons of steel ingot between March and November 2019, which is a rise of 4% compared to last year.
Iran produced 11 tonnes of gold in 2018, according to data from the World Gold Council.
In 2014, Iran launched the Zarshuran plant, which it billed as the biggest gold processing operation in the Middle East. Its exports of precious minerals, including gold and silver, were relatively insignificant however, totaling $160,000 in the year to March 2019.
Iran’s mines are estimated to have produced 315,000 tonnes of copper in 2019, according to data from International Copper Study Group (ICSG), accounting for about 1.5% of global supply.
ICSG preliminary data puts 2019 copper refined production at about 260,000 tonnes.
The chief executive of the National Iranian Copper Industry Company, which was sanctioned on Friday, told a local newspaper on Dec. 30 that more than 310 million euros ($345 million) was spent on a “massive copper production site that will come on line within the next few months.”
In the year March 2019, Iran exported copper chain and downstream products worth $917.53 million in the year. It has 2.6 billion tonnes of reserves. One of its major mines is the Sarcheshmeh complex in the southeast Kerman province.
In 2019, Iran is forecast to have produced about 140,000 tonnes of mined zinc production and around 50,000 tonnes of lead, according to the International Lead & Zinc Study Group.
The country has 300 million tonnes of lead and zinc reserves but the sector is largely underdeveloped.
The Mehdiabad project, with one of the world’s biggest zinc deposits, has been under consideration since the 1990s.
Reporting By Maha El Dahan, Bozorgmehr Sharafedin and Zandi Shabalala; Editing by Jan Harvey and David Evans
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