Iran To Invest $5 Billion In Afghanistan's Iron Ore Sector

The Islamic Republic of Iran is set to invest $5 billion in Afghanistan's iron ore mining industry, according to a report by Iran's state-run Fars News Agency. Iranian Ambassador to Kabul, Alireza Bikdeli, described Afghanistan's vast mineral resources as a“strategic opportunity” for economic cooperation between the neighboring countries.

The report, published on Monday, highlights that the investment is expected to significantly elevate Iran's position in the global steel production rankings. By importing Afghanistan iron ore at $100 per ton and processing it into steel with a market value of $600 per ton, Iran aims to achieve a sixfold return on its investment.

According to Afghanistan's Ministry of Mines, Iran has already invested approximately $2.3 billion in the country's mining sector in recent years. The new agreement between the two nations includes a five-year cooperation deal for iron ore extraction, with projected annual profits for Iran exceeding $1.2 billion.

Iranian outlet IMNA noted that access to low-cost raw materials from Afghanistan could increase Iran's share in Asia's steel production market by 20%, potentially advancing its global ranking from tenth to sixth place. Alongside China and Russia, Iran continues to show growing interest in Afghanistan's untapped mining potential.

Over the past three years, bilateral relations between Iran and Afghanistan have expanded markedly. Diminished trade and transit ties between Afghanistan and Pakistan, combined with Tehran's strategic outreach, have led to a reported $4 billion in annual trade volume between Iran and Afghanistan.

Iran has authorized its border provinces to fully leverage economic and trade opportunities with adjacent Afghanistan provinces. This includes initiatives to open a new consulate in Farah province, reflecting Iran's increasing engagement with local Afghanistan's authorities.

Observers note that Iran's deepening economic and diplomatic ties with Afghanistan signal a long-term interest in shaping regional influence through strategic infrastructure and resource investments, despite broader international concerns about governance and human rights in Afghanistan.

MENAFN14052025000228011069ID1109548199