The newly-discovered lithium reserve holds up to 8.5 million tons of the element, an official from Iran’s industry ministry told Iranian state television.

The US Geological Survey, which maps raw materials deposits across the planet, estimated total lithium reserves to stand at roughly 89 million tons. As such, Iran could hold up to 10% of all global reserves – and the country hopes it might bring it back to geopolitical centre stage, after years of economic sanctions and runaway inflation.

No infrastructure or FDIs

But experts say this is no panacea.

“Energy and infrastructure costs are particularly high, and there’s no foreign direct investments [FDIs] to support the Iranian mining sector,” Raphaël Danino-Perraud, research fellow at the French Institute for International Relations (IFRI), told EURACTIV.

The EU has categorised lithium, dubbed ‘white gold’, a critical metal for the continent’s ecological transition due to its role in batteries for electric vehicles and devices, and considered a key element in the push for net zero by 2050.

Surging demand for electric vehicles has seen lithium prices “skyrocket” by around 550%, a 2021 study by consulting firm McKinsey found. 

That said, “we can easily do without Iranian lithium”, Marc-Antoine Eyl-Mazzega, also of the IFRI, told EURACTIV. No Western companies will want to invest in Iran, he said: “only the Russians and the Chinese could look into it”.

China, a key metal exporter to the EU, is one of Iran’s last-standing economic allies.

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Iran historically exported minerals to the West, including iron ore, zinc and copper, among others. But years of international sanctions, first put in place in 2006 to curb Iran’s nuclear development program, led to underinvestment in the mining economy. International investors fled the scene years ago.

EU Critical Raw Materials Act in the works

Little is known about the new deposit, Danino-Perraud further warned – and questions remain over the extraction’s actual environmental impacts. Energy investments in Iran, should they get started again – and they won’t in the near future, he added – would most likely focus on gas, not lithium.

Iran’s announcement comes days before the European Commission is set to officially propose its EU Critical Raw Materials Act, which will require that “10% of the Union’s consumption of strategic raw materials” should be mined in the EU, according to a draft proposal seen by EURACTIV.

Currently, the EU is 100% dependent on foreign suppliers in 14 out of 27 critical raw materials and is 95% dependent on an additional three critical raw materials, including lithium, a report by the German Institute for Economic Research (DIW) found.

As part of the Act, the Commission will notably be looking to diversify its critical raw materials’ supply chains away from China, and will be identifying strategic projects in third countries.

While the EU is a long way from striking a deal with Iran, it “cannot be 100% autonomous on critical raw materials”, Danino-Perraud said, adding that strategic partnerships with other countries, especially in Africa and Latin America, will prove necessary.

> à lire sur EURACTIV