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Mineral Potential of Iraq & How to Approach it To AIG Members 18th June2014 Perth, Australia Presenter Wilson Gewargis(MAIG) Managing Director Agenda Opening Remarks Previous works & Geological Setting Iraq Minerogenic-North Mountain- Kurdistan Region Iraq Minerogenic- Western Desert Region Mining Act & Policies How to Approach & Success Q&A Opening Remarks Sep 2011-London Conference On Strategy for Creating World class Mining in Iraq Objectives To discuss privatization and develop opportunities in the mining, mineral and material industries. To exhibit and to extend business links with all industries related to mining, minerals, and materials in order to explore their suitability for revitalizing the industries in Iraq. To find the best solution for business to work in Iraq and resolve problems, if any, through direct talks with the Minister, Senior Advisors or Director Generals of the relevant industry. To develop networks as well as business cooperation and collaboration between governments, local industries, bankers, investors and their international counterparts Attendees: Minister of Industry and Minerals, National Investment Commission , Head of PM Advisory Committee, Senior Advisor to Ministry of Industry and Minerals, Director General, Geosurv Iraq, Ministry of Industry and Minerals Location Trend in global economic risks Greater Russia region 2.4% North American region Europe region 0.9% 1000 1.2% 1,500 500 1000 0 1,000 Middle East region 500 500 2020 2050 0.8% 0 2008 2008 2020 2020 1500 2050 2050 1000 Latin America & the Caribbean region African region 500 1.8% Asia pacific region 0 2008 0.9% 2020 2050 1.2% 600 2500 800 400 2000 1500 600 Legend 400 200 Production (Mn tonnes) 200 0 1000 500 2008 0 Consumption (Mn tonnes) 2008 2008 2020 2050 Compounded annual growth rate consumption Source: Energy Policy Scenarios to 2050, World Energy Council (values in mn tonnes) 2020 2050 0 2008 2020 2050 Where are we going? Investor Attention Iraq government Iraq is seen as a Generous supportive country with high incentives for bureaucracy, levels work force foreign investors constructive market efficiency such as: labour legislation, to support mining 10 yrs tax and reduced and resource exemption crimes are most project with significant sign of excellent existing Repatriation of profit from doing business in infrastructure investors Iraq 3yrs tax exemption from import fee GOI (Government of Iraq) has publicly stated commitment to attract foreign investment and has taken several steps to improve its investment climate National Investment Law (NIL) passed in 2006 provides a baseline for modern legal structure to protect foreign and domestic investors. In addition to providing tax and other incentives National investment Commission (NIC) and the Provincial Investment Commissions (PICs) are designed to be one-stop-shops that can provide information, sign contracts and facilitate registration for new foreign and domestic investors Previous work Groups: 1920- reconnaissance work was conducted which lead to the discovery oil in Iraq & exploration for minerals resources and industrial rocks started in early 1930 1954- an ambitious program for metallic & industrial minerals exploration was carried out by foreign and Iraqi geologists and key stratigraphy established in 1959 1961- mineral exploration conducted by the old soviet Union Companies Site Investigation Co. ( UK) : 19401958 Techno export (former USSR) : 19581965 Geological Survey of Iraq: 1965-2007 Polytechna ( CGS) : 1978-1980 1964- the Iraq National Oil company (INOC) was established and start with Seismic Survey and drilling. 1965- the geological survey of Iraq was established and initial task was systematically cover the country with regional survey on scale 1: 100,000 1972-1982- mapping program for Phosphate, Sulphur, Bauxite, Glass sand was completed by young Iraqi geologists. Bulgar Geomin : 1975-1978 Geozavod (former Yougoslavia ): 1980-1982 Geological Setting Iraq lies in the NE corner of the Arabian Peninsula, near the center of the so called “ Fertile Crescent” it is a land of contrasting geography within arid desert in the west and rugged mountains of Taurus and Zagros in NE and separated by central depression of Mesopotania In geological terms Iraq lies at the transition between the Arabian Shelf in the west and intensely deformed Taurus and Zagors Suture zones in the NW and SE The tectonic frame work of Iraq as been affected by the evolution of the Arabian Shelf to west and the NEO Tethyan margin to the north The geological structural frame works of Iraq is divided into the Thrust Zone to the North , Fold zone to the Mesopotamia Plain to the nnorthwest and unfold zone covering the western desert Geological Setting-contd The geological and structural development provided favorable conditions of formation of various types of mineral deposits and industrial rocks in Iraq Non–metallic sedimentary type developed in various rock units of the Arabian Platform(Western deserts) Igneous, metamorphic and hydrothermal deposits (including metallic ores.) are mainly found in the Zagros Suture Zones . Iraq Minerogenic Iraq Minerogenic-North Kurdistan Copper In the Zagros Suture Zones mostly of hydrothermal origin, associated with igneous rocks of basic and ultrabasic composition. Some of them part of the Meditteranean Cubelt related to ophiolites. Most of the occurrences are found in Mawat Massif. Hydrothermal origin Mafic / Ultramafic with Ni grade upto 1% Cu Qtz vein Copper vein carbonates rocks Volcanic/ sediment seq 0.1-3.4% Cu Sedimentary origin Grab sample up to 11.8% Cu Zinc / Lead Zn-Pb deposits, strata– bound and vein types are found in the Northern Thrust Zone of Kurdstan. They are Jurassic and Cretaceous in age associated with carbonate rocks occasionally with barite and pyrite Cr / Ni Found in the basic and ultrabasic igneous complexes of the Zagros Suture Zones, especially in Mawat Fe / Mn Metamorphic magnetite deposits are found in the Qandil Series (Cretaceous) in Penjween, Asnawa and Mishau( Kurdistan ) Moreover, ferromangnese nodules and lenses are found in the Qulqula Series (Jurrassic – Cretaceous) in various localities in Kurdistan. They are believed to be of submarine volcano – sedimentary origin. Barite Found in the Northern Thrust Zone of Kurdistan, mostly associated with Zn-Pb deposits. Iraq Minerogenic-Western Desert Quartz Sand(100km extent~99% Qtz) Silicon is the second most common element in the earth’s crust, where it occurs in the form of oxides and silicates. 75 Millions of tonnes of metallurgic silicon are produced from quartz sand High purity quartz–sand are found in the Gaoara formation (Permocarboniferous), Nahr-Umr and Rutba formations (Cretaceous ) in the Western Desert important raw material for solar energy panel making. 850 million tonnes approximate resources exist Native Sulphur& Phosphorite 60% sulphur of which extractable by frash method) is found in Middle Miocene Fatha formation in Mishrak Field near Mosul. To a depth of 100m thickness. 600m tonnes of native sulphur. More than 10 billion ton phosphorite of proved reserves are found in the Western Desert, mostly in the Paleocene Akashat Formation. Average grade is 20-25% P2O5. Annual production did not exceed 2 m.t. and totally used in fertilizers industry Gypsum, Lime st & Dolomite 130 mt reserve Building industry 8 billion ton reserve Cement industry 330 mt reserve Brick industry Others Mineral Reserve Industry Quartzite 16mt Silicon industry Feldspathic sst 2.3mt Ceramic industry Heavy minerals Zircon, Rutile etc Rare earth Kaolinite clay 1200mt Alumina production Bauxite-karst type deposit Iron stone Refractories industry 60mt All these figures are thought to be conservative Cement industry Mining Act & Policies Mineral Act Law 91/1988 established in year 98 then revised in 2003 which give more privileges to investors(Inv law 13/2006 benefits and guarantees for investors) The above law deals with areas allocated for mining and exploration( size, fees , grant period , condition& cancellation policies and prog of work ) The law is administrated by Min of Industries through the GEOSURV Negotiation for any concession or license has to be National investment Commission (NIC) and the Provincial Investment Commissions (PICs) Foreign investors required to establish or register a company in Iraq to apply and operate Foreign investors are encouraged to operate with Iraqi investors on JV / Partner basis The GIO offer a great incentive through tax and other means for foreign investors that needed to invest in Iraq not just to explore mineral but be part of nation rebuilding How to Approach & Success Investor should have a creative vision and plan of understanding and how to operate in country like Iraq Understand the min potential of Iraq ( Target and specific commodity) Take the advantage of GIO offering for investors Finding a good Iraqi Partner for speeding and assisting in the project progress and development Iraq need western technology and expertise to develop their huge unexplored mineral resources therefore the expat technical team should be familiar with custom and work environment in Iraq Time factor Recap and Why Iraq Strategic location in middle east . Makes it country well position for trade & investment High diversity of metallic and non metallic mineral deposits in addition to oil & gas Large reserves and good govt mining support (trained labor, equipment, energy and infrastructure) Widespread market with high demand percentage for multiple industrial use Cement and Construction Drilling mud Filter aids Fertilizer and Chemical Glass and Ceramic Refractories As raw material for local and export Solar energy Virgin land for investment in all economic sectors because of the massive need of countrys rebuilding Political support and marketing possibilities for Investors Encouraging investment legislations Conclusion Apart from the challenging risk environment that exist today, the GIO striving to overcome all these obstacle and to attract western investors to be a part of mining and mineral green revolution in which started in Iraq Iraq has excellent infrastructure(upgrading in progress), low energy and labor costs. Excellent trained labor and technical team supported with existing data, maps that will make easier to identify and develop these mineral resource projects. The strategic location in the middle east to supply these resources to high demand countries in the region, GDP growth, huge metallic and industrial mineral resource existence make the nation attractive for the western investors for now and near future QA Thank you for your attention ! Phone:08-9407 9243 www.minquestconsultants.com [email protected]