Russia and Iran are creating a $1.2 billion joint venture between state company Russian Technologies and Tehran state Bank Saderat to tap into Iran's colossal zinc deposits, Kommersant daily reported Tuesday.
The joint venture will build a mining complex and develop the Mehdiabad mine, according to a September 11 protocol from the Russian-Iranian trade commission meeting.
At the meeting Iran's Foreign Minister Ali Akbar Salehi and Russian Energy Minister Sergei Shmatko agreed to cooperate on the project.
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Russian Technologies will participate in the project together with a Turkey-Seychelles company Kapsad International, while Iran will be represented in the venture by Bank Saderat (BSI), a major institution blacklisted by the US Treasury and the UN Security Council.
A source close to the negotiations told Kommersant that the project was worth up to $1.2 billion, with most funds expected to come from Iran.
The Mehdiabad deposit in central Iran is believed to contain a total of 394 million tonnes of zinc, lead and silver, according to the Australian company Union Resources that was given a license to exploit the mine in 2006.
Australia's involvement in the project appears to be frozen.
"Given the current political environment in Iran, it may be some time before the development of the Mehdiabad project can proceed," Union Resources website says.