This response was echoed by several economic operators from Iran’s metals sector, including iron, steel, aluminum and copper, the country’s largest non-petroleum source of export revenue and the latest target of US President Donald Trump’s sanctions against the Islamic Republic.
Deputy Industries Minister Jafar Sarqeini also dismissed concerns about the latest US sanctions, saying high-quality Iranian products have their own international customers.
"Sanctions imposed by US President Donald Trump are unlikely to significantly impact Iran’s metals industry," he was quoted as saying by Tasnim News Agency, stressing that he saw no reason for concern due to the excellent quality of Iranian metals that meet international standards, Financial Tribune reported.
“Sanctions against Iran’s economy are not new; they just get tougher by the round,” Qadir Qiafeh, a senior member of Iranian Iron Ore Producers and Exporters Association, said.
“Business persons have learned to create workaround to US trade sanctions. Although some of these methods have been identified and can’t be used again, Iran’s mineral products will remain available on global markets,” he added.
Qiafeh believes that the executive order issued by Trump on May 8, 2019, to impose new sanctions on Iran’s industrial metals is more symbolic than anything else since the US had already announced on the same date a year ago that Iran’s steel, copper and aluminum industries were included in the first wave of sanctions.
“Despite that, the export of Iran’s base metals witnessed growth over the past year,” Mehr News Agency quoted him as saying.
Qiafeh stressed that a large part of mineral and steel exports is sold to neighboring countries by small- and medium-sized enterprises that usually slip under the US radar.
According to Iranian Mines and Mining Industries Development and Renovation Organization, a total of 57.7 million tons of mineral products worth $9.22 billion were exported from Iran in the year to March 20, down 5% and 2% in tonnage and value respectively compared to the year before.
Mineral exports had a share of 49% in tonnage and 21% in value vis-a-vis Iran’s total exports during the 12-month period, while mineral imports had a 12% and 9% share in tonnage and value of Iran’s total imports respectively during the year.
Semi-finished and finished steel products took the lion’s share of exports in terms of value, as about 8.9 million tons worth about $4.11 billion were shipped overseas, up 3% and 17% YOY in volume and value respectively.
Exports of iron ore concentrate stood at 5.87 million tons worth $380.95 million.
"These existing sanctions had been waived under the nuclear deal that are now being reimposed," said President of Iran Copper Association Bahram Shakouri.
“Iran’s metal exports were usually through third party exports that were made by an exporter or manufacturer on behalf of another exporter or exporters. Therefore, Washington’s new sanctions won’t amount to much, but it could carry some risks and costs,” he was quoted as saying by Fars News Agency.
Exports of copper and downstream products last year stood at 365,070 tons worth about $917.53 million, down by 52% in tonnage and up by 13% in value YOY.
“The decline in supply of raw materials and exports are challenges Iran’s aluminum industry will have to face because of US sanctions,” Abolfazl Rezaei, secretary of Iran Aluminum Industries Syndicate, said.
Sanctions would impose additional costs to the end-prices of aluminum products but the major challenge of this industry over the past years has been its heavy dependence on raw material imports, particularly alumina powder.
“In the past rounds of sanctions, we could manage to provide alumina powder under barter systems that imposed considerable costs to aluminum companies. Afghanistan, Turkey and Iraq are the main export destinations of Iran’s aluminum industry; new sanctions would hardly leave a dent on exports to these countries,” he added.
Iran's aluminum exports last year stood at 92,490 tons worth $178.05 million.
Bahador Ahramian, the deputy head of Iranian Steel Producers Association, believes that steel industry is harmed much more by domestic hurdles than sanctions.
“Excessive rules and regulations and inefficient bureaucracy are the biggest factors threatening the steel industry,” he said.
Referring to the comparative advantage Iran has in the production of mineral products vis-a-vis other countries, Ahramian said, “What US sanctions might do is to hurt this sector by increasing marketing costs and lowering prices. However, our exports will continue.”
Feryal Mostofi, a leading businesswoman in the mining industry and a senior member of Iran Chamber of Commerce, Industries, Mines and Agriculture, said Trump’s new sanctions will constrain Iran’s access to foreign exchange from mining exports and complicate the supply of raw materials and machinery.
“However, neighboring countries still need Iran’s steel, copper and aluminum, therefore sanctions won’t bring exports to a halt,” Otaghiranonline.ir quoted her as saying.
Iran is home to 68 types of minerals with more than 37 billion tons of proven reserves and 57 billion tons of potential reserves.
According to the United States Geological Survey, Iran holds the world's largest zinc, ninth largest copper, 10th largest iron ore, fifth largest gypsum and barite, and 10th largest uranium reserves. Overall, Iran is home to more than 7% of global mineral reserves.