Union Resources to Set Up 300,000 Ton, $1.2 Billion Zinc Plant in Iran
Union Resources Limited (ASX:UCL) (Queensland, Australia) has finalized an agreement with Mineral Products Procurement and Production Company (Tehran, Iran) to set up a zinc production unit near Mehdiabad in central Iran at a cost of $1.2 billion. Industrial Info Resources (Sugar Land, TX) reports that the plant will have a production capacity of 300,000 tons per year of zinc. Financial and shareholding details of the agreement are yet to be disclosed.
The two firms are expected to enter into an official contract for the project within the next two months. Construction of the plant is scheduled to commence two months thereafter and will be completed within three years in three phases of production capacities of 100,000 tons per year each. About 75,000 tons of soil zinc have been extracted from the Mehdiabad mines this year and an additional 100,000 tons of the mineral are likely to be extracted within the next three months. An initial resource estimate conducted in 2001 revealed the presence of 217.9 million tons of deposits comprising 7.2 percent zinc, 2.34 percent lead and 51 grams per ton of silver in the mine.
Union Resources is a single project organization focused on the development project of zinc-silver-lead deposits in Mehdiabad. Mineral Products is an affiliate of state-owned Iranian Mines and Mineral Industries Development and Renovation Organization. In 2005, Union Resources announced plans to mine 9 million tons of lead and zinc in central Iran. Union Resources, Iranian Mines and Mineral and Iran Itok (Tehran), an engineering, procurement and construction contracting firm, had established Mehdiabad Zinc Company, a joint venture entity, for the project with the organization having a 50 percent stake in the joint venture. In December 2006, the project was stalled because of a dispute following the purported termination of various agreements by the organization.
In 2007, Union Resources announced that it was in talks with Iran for a potential deal and declared that the zinc-silver-lead deposits in Mehdiabad were the largest undeveloped resource of zinc in the world at that time. In October 2008, the firm announced that it was negotiating with Iranian Mines and Mineral to resolve the dispute and had invested $103,000 to fund an environmental impact assessment undertaken by environmental consultants regarding the proposed construction of a zinc production facility for the project.
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