2012 Minerals Yearbook IRAQ U.S. Department of the Interior May 2015 U.S. Geological Survey THE MINERAL INDUSTRY OF IRAQ By Mowafa Taib Iraq was a significant supplier of crude oil to the world in steel imports was 4 Mt in 2012 (Annous, 2012; International 2012 and was the world’s ninth-ranked producer in terms Monetary Fund, 2013, p. 25; Organization of the Petroleum of volume. The country produced 3.1 million barrels per Exporting Countries, 2013, p. 55, 82; World Steel Association, day (Mbbl/d) of crude oil and condensate and accounted 2013, p. 26). for 3.7% of the world’s total output. Iraq, which exported 2.43 Mbbl/d of crude oil in 2012, was the world’s fourth-ranked Government Policies and Programs crude oil exporter after Saudi Arabia (7.56 Mbbl/d), Russia The Iraq Geological Survey (Geosurv-Iraq) identified (5.86 Mbbl/d), and the United Arab Emirates (2.66 Mbbl/d). 12 investment opportunities in the industrial mining sector in The country’s proved crude oil reserves, which were estimated Iraq and called for investors to develop mining operations under to be 150.1 billion barrels (Gbbl) and accounted for 9.0% of Investment Law No. 13 of 2006 and its modifications and Law the world’s total reserves, ranked Iraq as the fifth country in of Mineral Investment No. 91 of 1988. These potential projects the world in terms of the volume of petroleum reserves after were phosphate rock mining and beneficiation at the Al Hirri Venezuela (297.6 Gbbl), Saudi Arabia (265.9 Gbbl), Canada Wadi in Al Anbar Governorate and the Swab Wadi; a mining (173.9 Gbbl), and Iran (157.0 Gbbl). Iraq’s proved natural and processing facility for native sulfur deposits at Lazzaga and gas reserves were estimated to be 3.6 trillion cubic meters, or Mishraq in Ninawa Governorate; a silica sand production plant 1.9% of the world’s total reserves. Iraq was a member of the in Al Anbar Governorate; a feldspar concentrate plant from Organization of the Petroleum Exporting Countries (OPEC) feldspathic sandstone at An Najaf Governorate; a sodium sulfate (BP p.l.c., 2013, p. 6, 8; Organization of the Petroleum production plant to process glauberite, which is associated with Exporting Countries, 2013, p. 55). gypsum and clays at Shari Saltern in Salah ad Din Governorate; In 2012, Iraq, which did not produce any metal commodities, a sodium carbonate production plant that uses the Solvay produced several industrial minerals in modest quantities for process in Al Anbar Governorate; a plant to produce alumina local consumption. These commodities included bentonite, from kaolin using the lime-soda sinter process in Al Anbar cement, clay, gypsum, limestone, nitrogen and phosphate Governorate; a ceramic tiles and tile-bricks plant; gypsum mines fertilizers, phosphate rock, salt, sand and gravel, and sulfur in Al Anbar, Ninawa, and Wasit Governorates; and a chalk (pure (table 1). calcium carbonate) mine at the Wadi Al Ghadaf (Iraq Geological To encourage investment in the country’s nonmetallic Survey, 2013; Ministry of Industry and Minerals, 2013). sedimentary mineral resources, the Ministry of Industry and The Petroleum Contracts and Licensing Directorate of the Minerals (MIM) released its estimates for Iraq’s mineral Ministry of Oil conducted several petroleum bidding rounds in resources, which included 10 billion metric tons (Gt) of accordance with the Law of Private Investment in Crude Oil phosphorite, 8 Gt of limestone, 1.2 Gt of kaolinitic clay Refining (law No. 64 of 2007) and its amendments. In May, stones, 600 million metric tons (Mt) of native sulfur, 330 Mt the winners of the fourth oil and gas bidding round—which of dolomite, 130 Mt of gypsum, 75 Mt of quartz sand, 22 Mt attracted less interest from major international oil companies each of bentonite and glauberite, 50 Mt of halite salt, 16 Mt than had previous rounds and which was the first exploration of quartzite, and 2.3 Mt of feldspathic sandstones, as well as round intended for new crude oil and natural gas reserves—were substantial resources of construction sand, gravel, and sandstone announced. Pakistan Petroleum Ltd. of Pakistan was awarded (Ministry of Industry and Minerals, 2013). a license to explore for natural gas and oil in Block 8, which is Minerals in the National Economy located 110 kilometers (km) east of Baghdad. Kuwait Energy, along with Dragon Oil Plc. of the United Arab Emirates and In 2012, Iraq’s gross domestic product (GDP) increased Türkiye Petrolleri Anonim Ortaklığı (TPAO) of Turkey, were in real terms by 8.4% compared with an increase of 8.6% in awarded an exploration and development license on Block 2011. The Government revenue from the hydrocarbon sector 9, which is located 20 km north of Basrah in southern Iraq. accounted for 44.6% of the GDP. The value of Iraqi exports, Block 10, which is located southwest of Nassiriya in southern which consisted almost entirely of petroleum products, increased Iraq, was awarded to OAO Lukoil of Russia along with Inpex by 13% in 2012 to $94.3 billion from $83.3 billion in 2011. The Corp. of Japan and JSOC Bashneft of Russia. Block 12, which OPEC’s spot Reference Basket price for Iraq’s Basra light crude is located between the Muthanna Governorate and Najaf averaged $107.96 per barrel in 2012 compared with $106.17 per Governorate, was awarded to Premier Oil p.l.c. of the United barrel in 2011. The volume of crude oil exports and petroleum Kingdom (Ministry of Oil, 2012; U.S. Energy Information products increased to 2.42 Mbbl/d and 471,900 barrels per day Administration, 2013). (bbl/d) from 2.33 Mbbl/d and 162,000 bbl/d, respectively, in As of yearend 2012, a draft of the gas and oil legislation 2011. Iraq was the leading Middle East importer of cement known as the Hydrocarbon Law, which was first proposed in and the 11th-ranked steel importer in the world. The volume of 2007, remained stalled because of disagreements among Iraqi cement imports was estimated to be 12 Mt, and the volume of parties on wider political issues, including revenue sharing. Iraq—2012 49.1 The proposed law would create an oil and gas council to oversee Commodity Review the country’s oil and gas sector and would establish the Iraq National Oil Co. The proposed law also contains arrangements Metals for petroleum revenue sharing through the creation of an Oil Revenue Fund and a Future Fund. The Government was also Iron and Steel.—Iraq’s iron and steel sector attracted several planning to issue a new mining law that would attract investors international steel companies and investors because of the to develop the country’s industrial mineral resources. increased demand for steel products to satisfy the country’s In northern Iraq, the Kurdistan Regional Government (KRG), needs in the construction and hydrocarbon sectors. Iraq’s which is the ruling body of the federated region in northern Iraq, steel imports had been increasing in recent years; the country adopted its own hydrocarbon law in 2007 and awarded some imported 4 Mt of steel in 2012 compared with 2.6 Mt in 2011. 50 crude oil and natural gas production-sharing contracts in the In 2012, the State Company for Iron and Steel (SCIS) signed a Kurdistan region of Iraq by yearend 2012. KRG was planning final agreement with UB Holding Ltd. of Turkey under which to increase crude oil production to 1 Mbbl/d by 2015 from UB Holding would invest $700 million during 18 years to 200,000 barrels (bbl) in 2012 (Ministry of Natural Resources of rebuild the SCIS steel complex at Khawr az Zubayr in Al Basrah Kurdistan Regional Government—Iraq, 2013). Governorate. The project, which would be implemented in three phases and completed in 2016, was expected to produce Production 1.3 million metric tons per year (Mt/yr) of iron and steel products. The SCIS complex had been damaged during the war The major increase in the volume of Iraq’s mineral in 2003 and had remained idle ever since (Iron and Steel State commodity output in 2012 compared with that of 2011 was for Co., 2013; World Steel Association, 2013, p. 27). crude oil and condensate production, which increased by 11% In northern Iraq, the 50-50 joint venture of ArcelorMittal to 1.1 Gbbl from 1.0 Gbbl. Silica sand production increased of Luxembourg and Dayen Co. of Turkey planned to build by 733% to 1,439 metric tons (t); phosphate rock, by 105% to a steel minimill with an electric arc furnace (EAF). The mill 250,000 t; limestone for cement, by 14% to 4.6 Mt; and sand would have an initial production capacity of 250,000 metric and gravel, by 9% to 23.2 Mt. Notable decreases in the volume tons per year (t/yr) of rebar that could be increased to between of mineral commodity output in 2012 compared with that of 400,000 and 500,000 t/yr. The $100 million mill would use 2011 were for bentonite production, which decreased by 84%; local scrap metal to make billet and rebar. The project had been other refinery products, by 83%; kerosene and jet fuel, by 49%; scheduled to commence production in 2011, but production limestone (for construction), by 44%; natural dry gas, by 26%; was delayed to 2013, and the site of the plant was moved to and gypsum, by 17% (table 1). Arbil from As Sulaymaniyah. Mass Iraq Iron and Steel Industry Co. (a subsidiary of Mass Group Holding Ltd.