Iran revives millennia-old tradition as gold gains strategic weight

On a Thursday afternoon during the fifth day of the Ten-Day Dawn celebrations, a new gold and copper mine quietly entered production in Bajestan, eastern Iran.

Backed by private capital, the site has a nominal capacity of 1.2m tonnes of ore. A gold concentrate production line, already 30 percent complete, is under construction nearby and is expected to come online in the near future, extending the operation beyond raw extraction.

The project comes at a moment when gold’s economic and political significance has sharpened globally. Over the past three years, the price of gold has surged in international markets, moving from around $1,700 an ounce to levels approaching $5,000.

The rise has unfolded alongside an increasingly overt use of the US dollar as an instrument of political pressure, accelerating interest in gold as an alternative monetary anchor.

Gold occupies a distinctive place in the global economy. Investors prize it, consumers value it and industries rely on it across a wide range of applications.

Unlike financial assets, it is tangible, portable and widely trusted. When traditional markets falter, gold has historically provided a sense of security and continuity.

That role is reflected in official reserves: the United States, Germany and Italy remain the largest holders, while since 2021 China and Russia have rapidly expanded their stocks through domestic production and sustained purchases.

For China and Russia, gold accumulation has been paired with investment in financial infrastructure designed to reduce exposure to dollar-based systems. For Iran, which operates under some of the most draconian American sanctions, the relevance is more immediate.

The sharp depreciation of the rial against the dollar in recent years has fed directly into domestic prices, eroding purchasing power and destabilizing household finances.

The most recent wave of unrest was triggered by sudden currency movements, as the rising dollar translated into higher food, fuel and housing costs, before protests spiraled into broader disorder and significant human and material damage.

In that context, gold functions not only as an export commodity but as a store of value with direct social and monetary implications. Strengthening alternative reserves such as gold has become an economic priority rather than a theoretical policy option.

Iran’s relationship with gold is longstanding. Known locally as zar, the metal has been valued for thousands of years for its durability and resistance to corrosion. Archaeological evidence suggests gold was in use in Iran by the third millennium BC.

During the Median period, deposits were worked in the mountains around present-day Hamadan, alongside copper, iron and silver. Under the Achaemenids, gold production and metalworking expanded, supported by a prosperous economy.

It was during this period that Iran minted the world’s first gold coin. Introduced by Darius the Great, the daric established gold coinage at a time when most currencies were based on silver or base metals.

By the Sassanid era, cities such as Ctesiphon were active centers for trade in gold, silver and other high-value materials.

During the Safavid period, Shah Abbas is reported to have restricted gold extraction when costs outweighed revenues. In the twentieth century, Iran’s gold industry entered a new phase as social change and increased contact with Europe influenced jewelry design and production.

This cultural and historical depth now intersects with a renewed push to develop Iran’s mining sector.

According to national mining statistics, around 350m tonnes of gold-bearing ore have been identified across Iran. With an average grade of two grams per tonne and an estimated recovery rate of 85 percent, the country’s potential output is put at no less than 600 tonnes of gold.

From an economic perspective, gold mining compares favorably with other metallic resources. Copper and iron ore operations across Iran typically show high internal rates of return, and inactive mines in those sectors are now rare.

Gold has lagged despite comparable potential, largely due to gaps in processing capacity. That gap is now narrowing as technical expertise improves and recent projects demonstrate viable returns.

Established operations such as Mouteh and Zareh Shouran have been joined by newer entrants. Since 2019, a project known as Hirad Gold has been developed in South Khorasan province with private-sector participation.

The unit, with an annual capacity of about 200 kg, entered production in May 2023. Beyond direct employment, the project feeds into regional supply chains and local infrastructure.

Exploration has identified promising gold reserves in several provinces, including East and West Azarbaijan, Kordestan, Markazi, Isfahan, Sistan-Baluchestan and South Khorasan.

State-led planning combined with private investment is expected to expand extraction and production, reducing financial risk on both sides.

At the Mouteh mine in Isfahan, 24-carat gold bars in 500-gram and one-kilogram formats to international standards are produced, which are sold weekly on the physical market of the Iran Mercantile Exchange.

Despite this progress, large areas remain underdeveloped. South Khorasan and Sistan-Baluchestan stand out for their scale and relative neglect. Hirad is the largest defined gold zone in South Khorasan, and further exploration and development are under way within its wider license area.

Another eastern deposit, the Khounik gold mine, is undergoing advanced exploration, with investment from the Sadid Industrial Group tied to the construction of a plant designed to produce 200kg of gold bars.

Investor interest has grown noticeably. Over the past two years, major Iranian mining groups have shown stronger appetite for gold projects than for copper or iron.

Gol-e-Gohar mine’s involvement in the Siah Jangal gold mine in Sistan-Baluchestan is one example. In the same province, Impasco has identified significant copper and gold reserves at Janja, one of the country’s largest porphyry deposits.

A consortium led by the Mines and Metals Development Investment Company is now conducting technical studies for a processing plant following successful efforts to attract investment.

In short, gold’s presence through Iran’s economic life is resurfacing now as mines reopen, plants advance toward completion and investors return their focus to a resource that has shaped Iran for millennia.

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