Four big issues bedeviling the Manganese mining industry in Iran: Analysis of industry players

Table of Contents

Introduction

The Manganese mining industry in Iran, which is a key segment of the strategic metals industry in the country, is increasingly struggling to sustain itself as challenges mount to undermine its survival and expansion.

In a more thorough interview that was first published in 2022 but re-emerged under current economic pressures, Mohammadreza Raghebian, CEO of the Iran Manganese Mining Company (IMMC), stated that there are four key issues, namely:

the unrestricted trade in manganese and the products of manganese.
problems with obtaining specialized equipment.
burdensome government fees
escalating wage costs

Combined with international sanctions and legal loopholes in domestic policies, these problems have led to demands to strengthen government assistance to protect the domestic production and employment.

By 2025, when the world will be scrambling to satisfy the growing demand of manganese used in batteries and steel, underground mining in Iran will still struggle to cover the high cost of extracting this vital mineral, as a sign of the necessity to initiate a radical change that would place the country at the forefront of the regional producers of the resource.

Importance of Manganese

The physical and chemical attributes that have given manganese its reputation as a strategic metal make it an important component in many industries with steel production being the most prominent, as the metal constitutes approximately 80 percent of its worldwide usage.

It is a deoxidizer and increases the purity and quality of iron products, including beams and rebars. For example, high-grade manganese use is a key contributor to high-quality outputs of facilities such as the Isfahan Iron Smelting Company.

With estimated reserves of about 5.5 million tons (which has potential to hit high of 6.5 million with further explorations), Iran could supply the domestic needs in the next 25 years at least, assuming that the resources are well managed. But the underground character of these mines, as compared to the open-pit mining of the African giants of South Africa, Gabon, or Australia, increases the expense and makes it difficult to mine.

Role of IMMC

IMMC has a 55-year history as the largest manganese producer and supplier in Iran, a publicly listed company on the Tehran Stock Exchange with stock symbol Manganese.

Sells about 60 percent of the manganese demanded by the Isfahan Iron Smelting Company.
Makes 50 percent contribution to the Iranian Zarand Steel Company.
Provides supplies of 40 per cent of ferroalloy industries, electric arc furnaces and ferrosilico-manganese plants.

The company produces approximately half a million tons of manganese annually, half of the total Iranian output of approximately 200,000 tons.

In spite of these efforts, Raghebian cautions that the sector will stagnate without specialized measures, particularly with Iran targeting 55 million tons of steel output by 2025 (a target that would greatly boost the demand of manganese).

Issue 1: Extraction is expensive because of underground mining

The inherent high cost of underground mining in Iran is one of the most thorny issues. IMMC operations are depth-based (to 290 meters), which is much more costly than the open-pit operation common in the world.

These costs are increased by the steep slope of the manganese layers of Iran—85 to 88 degrees almost vertical.
Opposites to the softer slopes of the African mines, such as those of Tanzania and Namibia.

As Raghebian noted:

Compared to open-mine the extraction expenses and the completed price are significantly higher.

In 2025, this is added to by a more general energy challenge, as power outages are reducing operations to five days a week in certain instances, compelling firms to spend large percentages of budgets on wages and maintenance instead of expansion.

This is worsened by global trends in 2025 where manganese is expected to be in greater demand as electric vehicle batteries, as well as other electric vehicle parts, are expected to be in heavy demand, transforming supply chains and intensifying competition among low-cost manufacturers.

Concern 2: Machinery Supply and Sanctions

The importation of special mining equipment has been seriously hit by sanctions, and procuring underground mining equipment is rather a challenge.

General equipment such as loaders may occasionally get around restrictions via intermediaries.
Specialty tools necessary to reach deep mining are difficult to find, and extremely expensive—usually many times the pre-sanction rate.

Raghebian noted that these obstacles compel the cost to rise so as to undermine competitiveness. With geopolitical tensions still evident in 2025, the mining industry in Iran is still experiencing delays in updating equipment which, in turn, leads to the overall industry demanding that the government should prioritize the facilitation of imports.

Concern 3: Feeling overcharged by Government and Low Support

Underground miners such as IMMC are faced with the huge burden of government royalties of 5 percent of the selling price at the mine.

Such a rate can be tolerated when the operation is on an open pit but it affects profitability in the underground environment which is cost-intensive.

Raghebian condemned the indistinctiveness of policy.

Although IMMC is a listed company with operations that are well disclosed, it does not get any special protections or tax relief.

When the market bubble is bursting in 2020-2021 and the shares of the company began to plunge, the company even had to stabilize them as a market operator, without mutual government support.

This issue is still very relevant in 2025 as Iran pursues the growth of the mineral industry. To meet the development agenda, miners insist on increased specific support, including lower charges or incentives, to support the international policy of the 20-year perspective plan in 2025.

Concern 4: Competition through Importation and Wage Costs

The market has been flooded with uncontrolled imports, at the expense of domestic producers:

In Africa, more than 50,000 tons of manganese.
14,000 tons of Indian ferrosilico-manganese.

Raghebian supports increase in import tariffs to save the local industry and keep the production and employment incentive.

IMMC has 400 and 2,000 direct and indirect employees respectively.
Any kind of disruptions affects over 35,000 shareholders.

Add to this is a 57 percent wage rise over the last few years which, despite being necessary, is a strain financially in terms of power shortages and inflation.

IMMC will produce 110,000 tons in 2025, but this depends on the situation remaining stable.

It is developing a ferrosilico-manganese plant at the Nizar industrial zone:

Inflation increased the costs by 280 billion to over 400 billion tomans.
Half the project is complete.

Calls to action and Future Outlook

Iran Manganese Industry has potential to flourish on improved support in the future. Explorations up to 1,100 meters have ensured that it has enough reserves to support domestic steel ambitions, and external forces such as the Ukraine crisis, which disrupted a major world supplier, highlight the necessity of self-reliance.

Raghebian pressure the government to:

Prioritize miners
Restrict imports
Produce derivatives

This would dilute the influence of foreign policy, and secure employment.

By 2025, the world mining trend of manganese will be focused on green innovation, and environmental and social effects will lead the way as global operations grow around battery demand. In the case of Iran, such worries could open the door to Iranian potential, in line with more general interests of technological development and economic stability.