(Bloomberg) -- Foreign companies have put on hold many mining agreements with Iran because of uncertainty over future sanctions, according to the deputy minister of Iran’s Ministry of Industries, Mines and Trade.
Smaller projects of less than $100 million each are going ahead, Mehdi Karbasian said Monday in an interview in Tehran. Iran is seeking $50 billion in foreign investment in the mining industry by 2022, he said.
“Fearing they might get placed on a blacklist in the wake of the return of sanctions, the companies with whom we have made these deals have suspended almost all of the agreements and maintained a wait-and-see attitude pending the fate of new sanctions,” he said.
U.S. President Donald Trump imposed new curbs on Iran’s economy after the country conducted missile tests earlier in the year, and U.S. senators have introduced a bill to further tighten restrictions. Iran has more than 5,000 active mines, mostly privately owned, according to a 2013 report by the U.S. Geological Survey. Mining and manufacturing, led by steel and cement, account for 13 percent of gross domestic product, against 16 percent for crude oil and natural gas, the USGS said in the report.
In 2015, as international powers prepared to ease sanctions the following January, Iran was attracting interest from mining companies from Italy and France to Brazil and Australia. Plans were to double steel production by 2025, with German, French and Dutch delegations visiting Iran to discuss investments in steel and mining, Karbasian said in August 2015.
Iran hopes to sign contracts within the next two months for the expansion of Hormozgan Steel and Isfahan Steel, each of which has 400 million euros ($440 million) of deals with foreign partners, he said. Karbasian, who is also managing director of the state-run Iranian Mines & Mining Industries Development and Renovation Organization, declined to identify the foreign companies.