Bourse and Bazaar | Esfandyar Batmanghelidj: Mineral Commodities Limited (MRC),�a listed Australian junior mining company, has entered the Iranian market, announcing a series of acquisitions and exploration joint-ventures with an eye to the country�s rich copper, gold, cobalt, and lithium deposits.

In July 2017, MRC established a wholly-owned Iranian subsidiary, Madan Rahjo Kanyab Company. Bahman Rashidi has been appointed country manager and oversees a team based in Tehran.

MRC, which has experience developing projects in Australia and South Africa,�is based in Western Australia and is led by brothers Mark and Jospeh Caruso. The company has moved aggressively into the Iranian market with rollout beginning just this year.�In a statement, Mark Caruso, the company�s Executive Chairman highlighted Iran�s position as a �a world class �geological and mining jurisdiction� which makes the market attractive �despite global �rhetoric and uncertainty surrounding the lifting of sanctions in Iran.� For MRC, it was important to establish �a first-mover advantage� which has been met with �the willingness of the Iranian Government to support and reinvigorate investment in the mining sector.�

So far, the company has reviewed thirty potential �greenfield� and �brownfield� projects, and has so far executed two deals. The first deal is for Tuzlar, a gold and copper mine near Zanjan, in which MRC will exercise the option to acquire a 73.5% interest via its local subsidiary. Initially, MRC will make a USD 680,000 investment to acquire a 22.8% stake in the mine�s owner, Tuzlar Gold �Mining �and �Industry �Company, with an option to acquire the remaining 50.7% at a price of USD 2.5 million upon further study. Tulzar was one of the deposits first discovered by Anglo American when the global mining giant was exploring the Iranian market nine years ago, prior to the imposition of international sanctions.

MRC�s second deal is for Asbkhan, a copper and gold project located near Tabriz, in which MRC has the right to build a 75% stake in a special purpose vehicle established to develop and operate the mine. The company plans to spend USD 500,000 on further exploration and development work to earn its majority stake in the project pursuant to its recently concluded agreement.

MRC will fund further explorations of the local market from its operational cashflow and has earmarked USD 2.4 million for exploration budget for next year. The company has signed MOUs with the Geological Survey of Iran and Iran Minerals Production & Supply Company (IMPASCO) in order to furnish the data and site-access necessary to conduct further studies.

Iran�s geological resources have been long coveted in the global mining sector, and metallic and mineral deposits rival the country�s oil and gas reserves for overall economic value. Iran boasts 7% of the world�s total proven reserves of metallic and non-metallic deposits,�according to BMI Research, a market research firm. World-leading reserves of zinc, copper, and iron ore remain largely unexploited.

Any mining company seeking to develop and operate mines in Iran will need to work with IMIDRO, the state-owned conglomerate that oversees the largely underdeveloped sector. Deputy Minister Mehdi Karbasian, who is Chairman of IMIDRO, has stated that Iran is�seeking to attract�USD $50 billion in investment in the mining and minerals sector by 2022. A key strategy to achieve this goal is to support privatization in the industry, which many foreign investors consider a precondition.

The government's ambitious investment target is somewhat mismatched with the fragmented nature of the sector. Most mining in Iran is still conducted at an �artisanal� scale, with local miners extracting from small concessions using limited machinery.

This circumstance, and the absence of the mining giants, offers junior mining companies an opportunity to enter the market and consolidate projects of surprising value. But consolidation at this scale is unlikely to lead to the scale of investment sought in the government's new five-year economic development plan. IMIDRO has been courting the major mining and commodities firms, including Rio Tinto and Glencore, but political risks have largely dissuaded investment thus far. In the meantime, as MRC's market entry demonstrates,�it will be the smaller mining firms making the big moves in Iran.