Tehran / Kabul: Iran is set to invest over 5 billion dollars into Afghanistan’s iron ore sector, eyeing the country’s rich mineral reserves as a catalyst for regional power and economic integration.
Tehran’s Ambassador to Kabul, Alireza Bikdeli, called Afghanistan’s vast pool of mineral reserves a “strategic opportunity” to strengthen ties between the two neighbours.
The deal is a key part of Iran’s broader push to expand its steel industry—an effort that could lift its global ranking in steel production, according to Iran’s state-run Fars News Agency, as reported by Khaama Press.
By importing Afghanistan iron ore at 100 dollars per ton and processing it into steel with a market value of 600 dollars 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 dollars 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 dollars.
Iranian outlet IMNA reported that access to Afghanistan’s low-cost raw materials could increase Iran’s share in Asia’s steel production market by 20 percent, potentially propelling its global ranking from tenth to sixth.
Alongside China and Russia, Iran is showing an increasing focus in tapping into Afghanistan’s massive pool of mineral reserves.
Bilateral relations between Iran and Afghanistan have also grown significantly over the past three years. With trade and transit links between Afghanistan and Pakistan weakening, Iran has seized the opportunity to expand its strategic influence, resulting in a reported 4 billion dollars in annual trade between the two countries.
Additionally, Tehran has also given its border provinces the green light to fully capitalise on economic and trade opportunities with neighbouring Afghan provinces. This includes plans to open a new consulate in Farah province, underscoring Tehran’s deepening ties with local Afghan authorities.
Experts argue that Iran’s expanding economic and diplomatic footprint in Afghanistan reflects a long-term strategy to bolster its regional influence through investments in infrastructure and resources, even as international concerns persist over Afghanistan’s governance and extremely poor human rights.
UNI
