The Sangan Iron Ore Mines: A Role Model for Sustainable Development in Iran
The Society of Mining, Metallurgy, and Exploration is one of the four member societies that are part of the American Institute of Mining, Metallurgical, and Exploration Engineers. In addition to SPE, the other member societies are the Association for Iron and Steel Technology and The Minerals, Metals, and Materials Society. As part of SPE’s efforts to broaden the awareness of our members on key HSE issues of interest as well as share knowledge and network on related activities outside our industry, we are posting an article recently published by SME in their magazine Mining Engineering that addresses sustainable development initiatives in Iran. Questions regarding these initiatives should be directed to authors using the contact e-mails noted in the article.
By J. Kretschmann and R. Amiri
Mining Engineering Magazine
The Sangan iron ore mines (SIOM) in Iran are located in a remote area near the Afghanistan border. The SIOM deposit contains a geological resource of 1.1 Gt of mostly magnetite with an iron (Fe) grade ranging from 27 to 61%. The Iranian government plans a stepwise development of SIOM in cooperation with private companies to satisfy the growing demand of the Iranian steel industry. Sustainable development is an influential ethical concept in mining all around the world. However, a successful realization of a sustainable development plan is not possible without a foundation on the core values and regarding the specific circumstances of the individual mining country. This paper introduces SIOM and describes sustainable development activities undertaken during its development. From the early stages, these activities have been realized to secure the acceptance of the stakeholders in the region. To evaluate their effects, indicators were filtered to the ones with the highest priority for the stakeholders. Moreover, Islamic values and Iranian regulations and their influences on SIOM were analyzed.
Mining Industry in Iran
The Islamic Republic of Iran holds 68 types of minerals, including salt, sand and gravel, gypsum, chrome, lead, zinc, copper, coal, gold, and iron, with 33.5 Gt of proven reserves and more than 51.7 Gt of potential resources. Iran is ranked among the 15 major mineral rich countries (1). In accordance with the statistics published by Statistical Center of Iran, there were 5,316 active mines and 84,922 employees in the whole country in 2012–13 (2), and, according to the statistics published by Central Bank of Iran in 2011, the share of this sector in the gross domestic product of the country was 1.2% (3).
Sangan Iron Ore Mines (SIOM). SIOM is one of the largest iron ore deposits in Iran and is considered one of the Middle East’s richest deposits. It contains a total geological resource of 1.1 Gt of mostly magnetite with a Fe grade ranging from 27 to 61%. It is located 300 km southeast from Mashhad, the capital of Khorasan-e-Razavi province, and 18 km northeast of Sangan town, in Khaf County, at latitude N34°24′, longitude E60°16′ in the northeastern Khorasan-e-Razavi province, 30 km west of the Afghanistan border (4) (Fig. 1).
Fig. 1—Geographical location of study area.
SIOM is owned by the Iranian Mines and Mining Industries Development & Renovation Organization (IMIDRO). IMIDRO intends to develop an openpit mine complex and supporting facilities in SIOM for the production of about 18.5 Mt/a of iron oxide concentrate and pellets in four developing phases (5).
Sustainable Development in SIOM
SIOM is an example of a large-scale mine that is located in a special geographical and remote area. During the development of the mining complex, many economic, environmental, and social relevant activities have been realized in the Sangan area shown in Table 1. In general, these activities have contributed positively to the development of the region.
Table 1—Measures and impacts of SIOM supporting a sustainable development in the Sangan region (6).
Stakeholder Model for SIOM
Key stakeholders are those who are strongly affected by activities in the mining sector because they are affected by gains or losses caused by these activities (14).
In strategic mining management, the identification of key stakeholders in order to consider their interests and expectations is substantial. If mining strategies are based on a correct understanding of key stakeholders’ interests and expectations, the implementation of these strategies and measures is easier due to fewer conflicts (15). Key stakeholders of SIOM—including their parts Sangan Iron Ore Project, Iran East Iron Ore Company, and Sangan Iron Ore Complex—are illustrated in Fig. 2.
Fig. 2—Stakeholders of SIOM.
The main expectations of key stakeholders in the Iranian mining sector, especially SIOM, regarding sustainable development should be considered in the strategy of the SIOM top management (Table 2).
Sustainable Development Indicators. Policy- and decision-makers can choose from many indicators to assess the progress toward realizing sustainable development in their businesses. To select the most appropriate indicators for the development of SIOM, the authors have chosen sustainable development indicators on the basis of a two-stage process. First, the indicators were selected by the criteria of long-term measurability and relevance to the most important stakeholders of the mining project. Second, the evaluation was based on a fuzzy Delphi method (FDM), using questionnaires that were distributed among representatives of the different stakeholder groups (6). Fig. 3 illustrates the steps of selecting the most applicable sustainable development indicators (SDIs) to SIOM.
Table 2—Expectations of key stakeholders of mining sector in relation to the sustainable development (16).
Table 3 includes the result: a ranking of the 15 most important social, economic, and environmental indicators. These are the ones that really matter to evaluate the sustainable development of SIOM for the stakeholders. These indicators are measurable and widely accepted. This is an approach to realize the global concept of sustainable development locally.
Examples of Sustainable Development Indicators
Net Enrollment Rate in Primary Education. The indicator shows the proportion of children of primary school age who are enrolled in primary school. Universal primary education is an important goal of the international sustainable development agenda. The indicator is the ratio of the number of children of official school age (as defined by the national education system) who are enrolled in primary school to the total population of children of official school age (Fig. 4) (10).
Fig. 3—Selection process of DSIs applicable to SIOM.
The number of children enrolling in primary education has increased during 1996–16. The ratio has increased from 66.7% in 1996 to 98.8% in 2015. This can be attributed to the construction of higher education institutes by SIOM officials in the framework of corporate social responsibility activities. Having opportunities to pursue studies in higher levels or to get a decent job seems to increase the motivation of parents to get their children educated.
Length of Railway. In an isolated region such as Sangan, railways as “development corridors” have a significant impact on improving the overall situation of the region (9). This indicator is the ratio of length of railways under operation in Khaf County to the whole Khorasan-e-Razavi Province (Table 4).
The main reason for expanding the railway system in Khaf County was the presence of SIOM. From 2011 until 2014, the construction of railways accelerated due to the inauguration of SIOM and the increase in production and transportation (9).
Table 3—The most important sustainable development indicators to evaluate SIOM by external stakeholders (6).
Water Consumption. SIOM is located in Khaf township. Khaf is known for arid and dry weather in summer and temperate winters. Due to the high distance from sea and low precipitation, there is no specific permanent river in the area, just temporary ones in winter after rainfall (13). Besides these natural characteristics, over exploitation of water supplies, growing population and increasing water consumption in industry are constraints that restrict the possibility of agriculture and threaten the future development of this region (5). Hence, the water consumption of SIOM is a crucial factor to guarantee a sustainable operation of the whole system. The most important indicator is the ratio of the annual consumption of water in SIOM compared to the annual consumption in Khaf County in total. Fig. 5 shows the trend of the water consumption ratio between 2007 and 2015. SIOM´s share of consumption has increased dramatically. Therefore, strategies to reduce the use of water resources have a high priority.
Fig. 4—Ratio of enrollment at primary school (11).
Sustainable Development and Islamic Laws and Regulations
Because Iran is an Islamic country and its constitution is in accordance with Islamic ethics, an analysis of the religious fundamental is helpful to understand religious key stakeholders and their interests. The dominant religion in Iran is Islam, with 98 percent of Iranians belonging to the Islam religion. Of this group, 89% of Iranians are Shi’a and 9% are Sunni. Hence, the Quran has been chosen as the main source to find out the position of environment and its exploitation in Islamic ethics. The Prophet Muhammad is the prophet of Islam and is usually referred to by Muslims as the Messenger of God (Rasulullah) (17).
Table 4—Length of railway in Khaf and Khorasan-e-Razavi (12).
Islam and the Environment. Environment protection is an important aspect in the Quran. According to the Quran, each known or unknown creature in the universe performs two major functions: a social function in the service of mankind and a religious function as it evidences God’s omnipresence, wisdom, omniscience and omnipotence (20).
Muslims are encouraged to reflect on the relationship between living organisms and their environment—especially water (21,
Fig. 5—SIOM´s share of water consumption in the region between 2007 and 2015 (13).
22), air (23), and plants and animals (24)—and to maintain the ecological balance created by Allah. Protection of the environment is essential according to the Quran, and mankind has the responsibility to ensure safe custody of the environment (18). Fig. 6 illustrates the Islamic approach toward the environment. The Quran prescribes how humans should use the environment. Islamic teachings are meant to take proactive care of the environment based on principles of environmental protection (19).
General Rules To Protect the Environment From Harm
Islamic jurisprudence includes many rules that can be interpreted as a foundation of a sustainable development approach. For example (25):
Fig. 6—Islamic approach to the environment.
“Do no harm.” This means that a human being may not cause harm to himself or to others. And he may not sustain harm as a result of the acts of others. Each person is entitled to use water for drinking and personal purposes, but may not pollute or waste it. Each environmental right has a corresponding environmental duty.
“Warding off evil takes precedence over bringing benefits.” If an act that a person intends to do brings benefits but could also cause major harm to others, such an act is forbidden in Islam. For example, if somebody dumps chemical waste in oceans, it might raise profits, but cause harm to sea life and humans. Therefore, such an act is forbidden.
“Sustaining personal harm to ward off public harm.” The damage resulting from avoiding the frequent use of pesticides and relying on biological rather than chemical resistance is much less than the damage inflicted on many creatures as a result of polluting the soil with chemicals, adversely affecting human beings and animals as well as killing micro-organisms in the soil that are needed for its fertility.
“Harm shall be removed.” The causes of harm must be removed. When ships dump waste in the sea, they pollute and destroy sea life and disturb the environment balance. The entity causing harm must take all necessary measures to remove the adverse effects of its acts, because they destroy the earth. According to the Quran, God pledges to severely torture those who do mischief on earth. This warning causes people to control their acts and bear responsibility for them.
“General rules to preserve the Earth’s resources.” A further important Islamic principle related to the protection of the environment is the Islamic prohibition concerning thoughtless consumption; that is, wastefulness and extravagance. Wastefulness is not only the thoughtless consumption of natural resources, it is at the same time disrespectful toward God. At this time, it’s widely known that the world’s resources (including mining resources) are limited. Extravagance and overconsumption will affect not only current dwellers but also forthcoming generations. Therefore, human beings are compelled to be aware and sensitive concerning this matter (26).
Constitution of the Islamic Republic of Iran
The constitution of the Islamic Republic of Iran was prepared after the Islamic revolution in 1978 and it was recognized after receiving the majority of votes in the referendum in March 1979 (27).
Some specific items of the basic principles of the constitution of Iran related to sustainable development (in the case of social, economic and environmental) are the following (28):
Social. Article 19. All people of Iran, whatever the ethnic group or tribe to which they belong, enjoy equal rights; and color, race, language and the like do not bestow any privilege.
Article 30. The government is bound to make available, free of charge, educational facilities for all up to the close of the secondary stage and to expand free facilities for higher education up to the limits of the country’s own capacity.
Economic. Article 43. The economy of the Islamic Republic of Iran, with its objectives of achieving the economic independence of the society, uprooting poverty and deprivation, and fulfilling human needs in the process of development while preserving human liberty, is based on the following criteria:
- The provision of basic necessities for all citizens: housing, food, clothing, hygiene, medical treatment, education, and the necessary facilities for the establishment of a family.
- The utilization of science and technology and the training of skilled personnel in accordance with the developmental needs of the country’s economy.
Environmental. Article 50. The preservation of the environment, in which the present as well as the future generations have a right to a flourishing social existence, is regarded as a public duty in the Islamic Republic. Economic and other activities that inevitably involve pollution of the environment or cause irreparable damage to it, therefore, are forbidden.
Rules, Regulations, Special Laws and Statutes Related to Mining
In this regard, several national sources were reviewed and issues related to sustainable development principles were extracted. The most important ones are listed in Table 5.
Table 5— Examples of the attention of the Iranian mining rules and regulations to sustainable development.
Rules and Regulations of the First to Fifth 5-Year Development Plans of the Islamic Republic of Iran
After two, 5-year development plans (FYDP) were implemented unsuccessfully in the 1990s, the government of the Islamic Republic prompted the third FYDP to strengthen structural reforms, including promotion of the private sector, development of private domestic and international banks and insurance companies, and substitution of tariffs for quantitative trade restrictions. The following fourth FYDP was comprehensive, contained abundant quantitative targets, and constituted the first of the four pillars of a 20-year economic and social vision to significantly upgrade Iranian economic, political, and social status. The plan underscored a smaller government role in the economy, drew attention to enterprise privatization, and stressed more reliance on market forces. After the fourth FYDP, the government deliberated on a currently valid fifth FYDP with many targets that were much less quantitative, but a compilation of wishes and desires (33) upon the economic, social and cultural development of the Islamic Republic of Iran (6).
In all of these plans, aspects of sustainable development are included, especially in the third, fourth, and fifth plan. The main reason is the development of new management approaches according to the principles of sustainable development in the late 1990s. So the priorities of the government authorities at that time (which is known as the construction period) were mainly focused on the improvement of the country’s infrastructure. After that period, coinciding with the start of the third development plan, the considerations and approaches to the principles of sustainable development have been increased by the government.
Strategy Formulation for SIOM
The establishment of strategies, the development of strategic plans, and the implementation of those strategies and plans are key management processes in enterprises (34). A strengths, weaknesses, opportunities, and threats (SWOT) analysis is a simple but widely used tool that helps in understanding the strengths, weaknesses, opportunities and threats involved in a project or business activity. Strengths and weaknesses are usually internal to the organization, while opportunities and threats are usually external (35).
The SWOT analysis was conducted for SIOC (Table 6), which is currently the main subsidiary of IMIDRO in SIOM.
Table 6—Comprehensive framework for SIOC strategy formulation (36).
In SWOT analyses, external and internal factors are examined to identify corporate opportunities, threats, strengths, and weaknesses. The analyses usually described by a SWOT matrix are a tool to develop suitable strategies for a company (36).
Considering the economic, social and environmental situation in SIOC and Khaf region, the SWOT matrix was filled by experts who are familiar with the project and the situation. Each component within the matrix was scored and ranked according to the importance and sensitivity.
After the SWOT analysis and according to the quantitative strategic planning matrix, a set of strategic measures was suggested ranked on the basis of feasibility and priority long term (Table 7).
Table 7—SIOC strategic priorities.
According to the analysis, a comprehensive crude iron ore pricing method has the highest priority and should be considered seriously by top management. Subsequent priorities are the construction of an airport, selling products on the energy market, and the development of renewable energy sources.
Mining and mineral industry are important sectors in many developed, developing, and less-developed countries. However, the mining industry in comparison with many other industries is known as risky. Its success depends on and is sensitive to economic, environmental, social, political, and other circumstances.
The Islamic Republic of Iran is ranked among the world’s 15 most mineral-rich countries. Hence, sustainable mining management should have priority in the country’s development strategy. This paper has described some fundamental aspects to develop a strategic approach based on sustainable development in Iran.
Therefore the authors have:
- Reviewed religious and legislative aspects.
- Undertaken and evaluated measures in SIOM.
- Examined SIOM to assess its influence on the sustainable development of the region by selecting 15 indicators using the FDM.
- Analyzed expectations of key stakeholders.
All analyses and the results should pave the way for a more sustainable management of SIOM. Hence, the SWOT method was applied to examine the strengths, weaknesses, opportunities, and threats for SIOC and the most important strategic measures were suggested.
The hope is that all measures help to secure a sustainable strategic management approach of SIOM and make this a role model for similar projects in other mining countries, especially Islamic ones.
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J. Kretschmann is president, TH Georgius Agricola University of Applied Sciences, Bochum, Germany. R. Amiri is a PhD student at RWTH Aachen University, Aachen, Germany, and can be reached at email@example.com.