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May 2017, No. 83


Mahdiabad Lead, Zinc and Barium Complex

Mahdiabad Zinc and Lead Mines Development Plan

Introduction

According to geological studies, the lead and zinc deposits in Mahdiabad is about 716 million tons. The lead and zinc oxide-sulfide mines have a world-class deposit and can turn into one of the world’s largest zinc mines.

With the prudence of President Hassan Rouhani’s administration and after the international restrictions against Iran were lifted, Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), called on international investors, with the aim to attract foreign capitals, to participate in a tender to build zinc producing factories. Reliable domestic and foreign companies took part in the tender and eventually, after about 8 months, the winner was identified and introduced.

The investment process would be such that the investor, after financing of the project, tailings removal, preparation of the mines, construction of factories and supplying its infrastructure, takes steps to make the project operational. In addition to that, the investor is also responsible for the planning and mining operations. It is expected that the operation of the plants would have a significant impact on the communities around the project as well as on the economy of the country so that the complex accomplishes its social responsibilities, too.

Project Objectives

The main objective of the project is the annual production of 800,000 tons of zinc concentrate with a grade of at least 35 percent as the main product, and also lead-silver concentrate production as a by-product.

The duration of the contract is 24 years, 4 years of which would be spent on studies, preparation of mines, and construction of processing plants, while the remaining 20 years will be a period of commercial operation. The contract period can be extended after the culmination of 24 years.

Mahdiabad Zinc Mine Deposit

Mahdiabad lead and zinc mines are located 116 kilometers southeast of the city of Yazd. The mines have repeatedly been discovered by different companies since 1960s. Based on optimization studies, the extractable reserves in the optimized pit with an average grade of 3.2 percent is over 154 million tons. The zinc average grade is 6 percent and the lead is 2 percent.

The world metal deposits containing zinc is about 250 million tons while the world largest zinc reserves lie in Australia, China, Peru, and Mexico.

Mahdiabad reserves containing zinc ore is estimated to be around 21 million tons. This amount is about 8 percent of the world’s known reserves. Accordingly, Iran ranks third after Australia and China in terms of the world’s zinc reserves. Therefore, exploitation of the reserves with such a dimension requires participation of investors, technological experts, planners and engineers at the worldwide level. That’s why the call for attracting investors was held internationally, and many companies, including Glencore Multinational Commodity Trading and Mining Company, took part in the bid, and are now active in Mahdiabad Mines alongside the winner of the bid.

Environment

Since Mahdiabad lead and zinc mines are located in the environmentally protected zone, the respect for and protection of the environment are of utmost importance; therefore IMIDRO commits itself to the highest degree of sensitivity to comply with environmental regulations. Hence, the kind of the equipment and technology used in the mines should observe environmental standards.

Financial and Investment Security

In an investment process, one must be sure of three issues: preservation of the capital, return on investment (with acceptable risk) and secure business environment.

With respect to the investors’ concerns about the risks, the investment contracts of Mahdiabad lead and zinc mines were brought under FIPPA (Foreign Investment Promotion and Protection Act). The most significant rights that are awarded to foreign investors on the basis of FIPPA include the following:

  •  Enjoying equal treatment with domestic investors;

  •  Receiving compensation resulting from expropriation and nationalization of foreign capital;

  •  Exchange of profits, capital and its interests to foreign currency;

  •  Receiving damage caused by legislations that would ban or cease implementation of financial contracts of foreign investors.

Factories Belong to Investors

The ownership of the factories and the constructed infrastructure built by the investor, belongs to the manufacturer.

Sales and Exports of the Product

With respect to the importance of non-oil exports, IMIDRO prioritized such exports and prepared the ground for its realization. The organization also gave the opportunity to the investors to offer their products in domestic and foreign markets.

Selection of Product and Technology Types

The investor must observe appropriate environmental standards when choosing the type of technology and manufactured products.

Meanwhile, Iran’s largest barium ore is also located in Mahdiabad Complex, and it is extracted and sold as a by-product. One of the future plans of the complex is construction of barium processing line and production of barium powder with 3.8 to 4.3 specific gravities.

Mahdiabad extracted barium ore has been tested by reliable laboratories and enjoys the required standards in oil drilling and other related industries. Mahdiabad Complex has the potential to sell and export barite and barium powder, and in this regard you may contact the complex through the following address or phone and fax numbers:

Yazd Office: 75 km from Mehriz, Mahdiabad Lead and Zinc Complex

Tel.: (+98)353-2554191-9

Fax: (+98)353-2554190

 

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  May 2017
No. 83