The Mining Industry’s New Frontier could be in the West Asia Region
Europe’s mining sector holds a critical role in ensuring the continent’s access to essential materials for industrial production and the green energy transition. Among the key players in this sector is Sweden’s Boliden, a mining and smelting company specializing in base metals like copper, zinc, and lead, along with precious metals like gold and silver. Boliden has built a reputation for its focus on sustainability and efficiency, but like many European companies, it is missing out on a valuable opportunity: Iran’s untapped mining sector.
Iran, home to some of the largest mineral reserves in the world, could have been a major partner for Boliden, offering access to vast deposits of copper, zinc, and other critical resources. However, due to the European Union’s alignment with U.S.-led sanctions and the lack of political will to engage economically with Iran, companies like Boliden are restricted from entering this resource-rich market. The result is a significant economic and strategic loss for both Boliden and the EU as a whole.
Iran’s Mining Sector: A Wealth of Untapped Resources
Iran’s mineral wealth is staggering. As one of the top 15 countries globally in terms of mineral reserves, Iran possesses more than 37 billion tons of proven reserves across 68 different types of minerals. The country’s mining sector has immense potential, yet it remains underdeveloped, contributing only 1% to the nation’s GDP. With proper investment and technological support, experts estimate that the sector could generate over $22 billion annually and create hundreds of thousands of jobs.
Key resources in Iran that align with Boliden’s expertise include:
- Copper Reserves: Iran holds some of the world’s largest copper reserves, estimated at over 4 billion tons. The country’s copper mines, such as the Sarcheshmeh and Sungun mines, rank among the largest in the world. Copper is a key material for electrification, renewable energy systems, and electric vehicles (EVs)—industries that are rapidly expanding globally. Boliden, which operates several copper mines in Sweden and Finland, could have leveraged its expertise to develop Iran’s copper sector.
- Zinc Deposits: Iran is home to the Angouran Mine, one of the largest zinc reserves globally, with an estimated 9 million tons of zinc and 2 million tons of lead. Zinc is a crucial material for galvanizing steel and producing batteries, both of which are integral to the automotive and construction industries. Boliden, being one of Europe’s largest zinc producers, is uniquely suited to capitalize on this resource.
- Precious Metals: Iran also has significant reserves of gold and silver, often found as byproducts of copper and zinc mining. Boliden’s experience in extracting and refining precious metals could have opened new revenue streams for both the company and Iran’s mining sector.
Boliden’s Expertise: A Perfect Fit for Iran
Boliden is no stranger to operating in resource-rich regions with untapped potential. With mining operations in Sweden, Finland, Norway, and Ireland, the company has extensive experience in extracting and processing base and precious metals. Boliden’s operations are characterized by a strong commitment to sustainability, with a focus on reducing environmental impact and improving energy efficiency.
For example:
- Boliden’s Kevitsa Mine in Finland produces copper and nickel with some of the lowest carbon footprints in the industry. Applying similar technologies to Iran’s copper mines could have modernized the country’s mining sector while ensuring compliance with international environmental standards.
- Boliden is also a leader in recycling metals, particularly copper and precious metals, which could have complemented efforts to make Iran’s mining operations more sustainable.
Iran’s mining sector is in dire need of modernization. Many of its mines still rely on outdated technologies and lack access to advanced processing facilities. Boliden’s expertise in automation, digitalization, and sustainable mining practices could have transformed Iran’s mining industry, boosting efficiency, reducing waste, and minimizing environmental damage.
Economic Losses for Boliden
By being unable to access Iran’s mining sector, Boliden is missing out on a lucrative opportunity for growth. Iran’s vast reserves of copper, zinc, and other base metals could have provided the company with a steady stream of resources at a lower production cost compared to Europe’s increasingly depleted reserves.
Here’s what Boliden stands to lose:
- Copper Demand: The global demand for copper is expected to grow by more than 50% by 2035, driven by the energy transition and the rise of EVs. Iran’s copper reserves could have helped Boliden secure long-term supplies, reducing its reliance on imports from politically unstable regions.
- Zinc Market Growth: Zinc demand is projected to grow at a compound annual growth rate (CAGR) of 4.3% from 2023 to 2030, fueled by the construction and renewable energy sectors. Iran’s zinc deposits could have strengthened Boliden’s position as a global leader in zinc production.
- Revenue Potential: Boliden’s revenue in 2022 was €8.4 billion, with a significant portion coming from copper and zinc operations. Access to Iran’s resources could have increased this figure by an estimated €500–€700 million annually, based on Iran’s production capacity and global market prices.
In addition to direct revenue, Boliden could have benefited from lower production costs in Iran, where labor and operational expenses are significantly cheaper than in Europe. These savings could have improved the company’s profit margins and global competitiveness.
Strategic Implications for the EU
Boliden’s inability to engage with Iran is not just a loss for the company—it’s a strategic disadvantage for the European Union. As the EU strives to reduce its dependence on imports from China and other non-EU countries, access to Iran’s resources could have been a game-changer. Instead, China has stepped in to fill the void, investing heavily in Iran’s mining infrastructure and securing long-term supply agreements for copper, zinc, and other critical minerals.
For Europe, this means:
- Increased Dependence on China: With China dominating Iran’s mining sector, the EU is becoming increasingly reliant on Chinese supply chains for critical materials—an unsustainable position given rising geopolitical tensions.
- Missed Employment Opportunities: Developing Iran’s mining sector could have created thousands of jobs across Europe, from mining equipment manufacturing to logistics and engineering services.
- Lagging Behind in Sustainability: Boliden’s absence in Iran also means that the EU cannot set global standards for sustainable mining practices in the region, leaving the field open to less environmentally conscious players.
A Few Ideas for the Future
While geopolitical challenges make EU-Iran economic cooperation difficult, the long-term benefits of engaging with Iran’s mining sector cannot be ignored. For Boliden, preparing for a potential re-entry into the Iranian market should be a priority. Steps the company could take include:
- Developing partnerships with Iranian mining companies, contingent on sanctions being lifted.
- Advocating for an EU-wide strategy that balances economic interests with geopolitical considerations.
- Investing in research to assess the feasibility of operating in Iran, including environmental and social impact studies.
For the EU, rethinking its approach to Iran is equally crucial. A renewed focus on diplomacy and economic engagement could open the door for European companies like Boliden and Eramet to access Iran’s resources, helping the bloc secure a sustainable, diversified supply of critical materials.
Boliden’s absence in Iran represents a significant missed opportunity for both the company and the European Union. As the world transitions to a low-carbon economy, access to critical minerals like copper and zinc will become increasingly important. Iran’s vast reserves of these resources could have strengthened Boliden’s position as a global leader in mining and metallurgy while reducing the EU’s dependence on external suppliers. However, political constraints and sanctions have kept this potential out of reach, allowing competitors like China to take the lead.
If the EU hopes to remain competitive in the global mining industry and secure its green transition, it must find a way to reconcile its political stance with its economic interests—before it’s too late.
