The Iranian state-run Fars News Agency has reported that the Tehran will invest $5 billion in Afghanistan’s iron ore mines. It is considered a significant step in deepening economic ties between the Iran and the Taliban.
Alireza Bikdeli, Iran’s ambassador to Kabul, emphasised that Afghanistan’s vast mineral resources offer valuable opportunities for bilateral cooperation. The reported investment is expected to significantly enhance Iran’s global position in steel production.
According to Fars, Iran’s growing demand for raw materials, particularly in its mining industries, combined with the potential for up to sixfold added value, makes Afghanistan an attractive source. Iran currently imports Afghan iron ore at approximately $100 per tonne and exports the processed steel at around $600 per tonne, highlighting the profitability of the venture.
Data from Afghanistan’s Ministry of Mines indicates that Iran has already invested $2.3 billion in the Afghan mining sector in recent years, including iron ore extraction. The current agreement outlines a five-year cooperation plan, projected to generate $1.2 billion in annual revenue for Iran.
Another Iranian outlet reported that Iran’s access to low-cost Afghan raw materials will increase its share of steel production in Asia by 20 percent, potentially elevating its global ranking from tenth to sixth place.
Alongside Russia and China, Iran has emerged as one of the leading foreign stakeholders interested in Afghanistan’s mining sector.
Economic and diplomatic relations between Iran and Taliban-ruled Afghanistan have expanded significantly over the past three years. A decline in trade and transit with Pakistan, combined with Iran’s strategic efforts to strengthen ties with the Taliban, has pushed the annual bilateral trade volume to approximately $4 billion.
In line with this regional policy, Iran has authorised its border provinces to fully leverage their capacities to develop commercial and economic partnerships with adjacent Afghan provinces. The Islamic Republic has also cultivated strong relations with the Taliban leadership in Kandahar and announced plans to open a new consulate in Farah province, further signalling the growing importance of its engagement with Afghanistan under Taliban rule.
