Union Resources granted zinc licenceSunday Jan 15 17:19...

Union Resources granted zinc licence
Sunday Jan 15 17:19 AEDT
Mining investment company Union Resources Ltd says it has been granted a licence by the Iranian government protecting its investment in a zinc deposit in the Middle East nation.

The Brisbane-based metals explorer said it could spend as much as $US682 million ($A903 million) on the Mehdiabad deposit in central Iran.

The company has a 50/50 joint venture with the Iranian government in the project, which it said is the largest undeveloped zinc deposit in the world.

Union was granted an exploitation licence for the site last month allowing it to be mined for the next 25 years.




Managing director Rob Murdoch said the foreign investment licence gave the company the same rights and protections as local investors.

This includes protection from expropriation from any political forces, which tended to worry investors, he said.

"The licence permits Union Resources to invest up to $US682 million ($A903 million) into the Mehdiabad Zinc Project...under the full protection of Iran's Foreign Investment Promotion and Protection Act," Mr Murdoch said.

"It means our shareholders are fully protected."

While he ruled out the likelihood of such an event, he said Iran would have to pay the company the international value of the asset if it ever sought to reclaim the site.

Mr Murdoch said it could take up to three years before the project generated cashflow. A bankable feasibility study is due to be released within the next five months.

The first two phases of the study showed it would cost $US600 per tonne over the life of the mine to produce a tonne of zinc metal, the company said.

Union has so far spent about $US10 million ($A13 million) on the project, 550 kilometres south-east of Tehran.

The licence also lets the company export at least 75 per cent of zinc it mines after the fifth year of operation.

Asked whether it would be able to begin exporting the commodity before then, Mr Murdoch said: "I think the Iranian government would probably like us to supply the domestic demand, which is fair enough...(but) I think we could export whatever we like because the market there is really market forces."