March 13, 2017 / 12:18 PM / 10 months ago

REFILE-Iran says inks $1 billion deal to develop Mehdiabad zinc mine

(Fixes spelling, paragraph 1)

By Maytaal Angel

LONDON, March 13 (Reuters) - Iran has signed a $1 billion deal with private investors to develop Mehdiabad, one of the world’s largest zinc mines, which it expects will go on stream in the next four years and produce 800,000 tonnes of zinc concentrate per year.

The Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO) said in a weekend statement it signed the deal with a consortium of six private companies, led by Iran’s Mobin Mining and Construction Company.

IMIDRO, a state-owned mines and metals holding company, said Mobin was also talking to international mining firms in Switzerland and Spain about joint ventures to develop the Mehdiabad mine, located in Iran’s Yazd Province.

Iran has struggled to lure foreign investors since the lifting of international sanctions against it following a historic deal signed in 2015 with six world powers in return for curbing its nuclear programme.

As recently as January, the United States voted to extend its sanctions against Tehran, the latest of several such post-nuclear deal moves that have deterred western banks from financing trade or investment in Iran.

Mehdiabad, a world class zinc, lead and silver deposit, has 154 million tonnes of proven reserves, according to IMIDRO, which expects the concentrate reserves to reach up to 700 million tonnes once exploration is completed.

The private consortium will run the mine for 25 years, though their contract could be extended.

On top of the targeted 800,000 tonnes of zinc concentrate, Mehdiabad is also expected to produce 80,000 tonnes of lead and silver concentrate a year, IMIDRO said.

According to industry data, 13.2 million tonnes of ore with zinc content was mined globally last year.

The Mehdiabad project has been under consideration since the 1990s but has faced multiple delays.

Editing by Jason Neely

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