Iran has lots of minerals, and it’s an unbelievably untapped market. There is more money in mining than there is in oil in Iran.
1. For how long have you been working with the Iranian market?
*MK: I started in 2007, working with the Iranian government, long before the sanctions were lifted. I had the idea of slowly starting to enter the Iranian market and build a network, so that, when the Iranian market would be able to do business with the rest of the world, I would be in a very good position to represent the interests of the new companies who would like to enter Iran.
From the beginning, my whole vision was to specialize in Iran; we want to present ourselves to the market as the only western company focused on the Iranian market within the oil, chemicals, and mining industry. For the last 10 years we’ve been building relations and working with decision makers. This got accelerated a lot when the nuclear negotiation started. Before it started, I had a phone call from my governmental partners in Iran who told me “Hey Mike, we are having secret negotiations with the Americans” –this was not in the news yet–, “so be ready, when trading with the West becomes again successful, we would like you to be in between, and to help us build relations with the Europeans”. So, in July 2015, that’s when I officially approached other companies around the world (before I was only doing business with Iranians). I was telling them that we have been in Iran for a long time, we are Westerners, but we are Iranians, so you will not find a better company to represent you. Now we have a portfolio of almost 20 billion euros of what we represent in Iran.
2. You do have some good 10 years-experience working with Iran. What are the two key lessons gained from this trading relationship?
MK: We help other companies in the world enter Iran successfully; our aim is to do that very quickly and perfectly, in order for them to start trading immediately. The lessons that I’ve learned are the following:
1) A lot of companies are not committed to Iran. Even when I speak to Iranians, they tell me “Mike, we have a lot of people coming to Iran, doing a lot of blah blah, but they do not pull the trigger”. They do not go full-steam ahead because they are too afraid of sanctions, of Donald Trump, of the banking system, of compliance-related issues. Iranians get frustrated and waste their time, Europeans go to Iran, and they also waste their time, and, at the end of the day, 15 meetings happen and zero contracts are signed. Some Iranian companies have stopped taking foreign companies seriously because they think that they are not serious. So the lessons that the Iranians and I have learned is that if you want to go into Iran then you really have to be committed.
2) The companies that are committed and make the decision to enter Iran, don’t have the personal relationships with the leaders in Iran. They think, for example, that just because they are very successful in Australia, Iranians will buy it. If you go to Iran alone, and you don’t know who the decision maker is, you are not going to have anything done, apart from having some kebab and tea. You have to have a personal relationship with those people. Things in Iran don’t go as fast as things go, for example, in Germany. You will not have anything done by a delegation trip for five days arranged by an embassy. Go in Iran now, and with someone that knows the market.
3. Will Iran continue being a protagonist in the energy “play”?
MK: Absolutely. Iran is less developed than Africa when it comes to mining. There are no companies mining in Iran. Iran has lots of minerals, and it’s an unbelievably untapped market. There is more money in mining than there is in oil in Iran. Iran will be a super power in mining. When it comes to energy and chemicals, Iran is already a superpower. Just because sanctions are prohibiting companies from buying, that doesn’t mean that Iran is not the second largest gas, and third largest oil producer in the world.
“All these untapped mines in Iran are like heaven, you just need to pick yours; the Iranians don’t have the money, technology, or knowledge to do anything with them, so the mines are just sitting there, waiting for the big mining companies to help them. Because mining is so underdeveloped, mining companies can go in very cheaply, getting a great deal.”
4. Why do you think that the mining industry is untapped in Iran?
MK: Iranians prioritised investing all their money into the energy sector, and not in mining. All these untapped mines in Iran are like heaven, you just need to pick yours; the Iranians don’t have the money, technology, or knowledge to do anything with them, so the mines are just sitting there, waiting for the big mining companies to help them. Because mining is so underdeveloped, mining companies can go in very cheaply, getting a great deal
5. How could Kantering help companies enter the Iranian market?
MK: We partner with companies, and then we go together into Iran. We have already been doing it for oil, chemicals, and we want to expand to mining too. If there’s any market where I would personally invest in, that’s definitely mining. From a business perspective, our strategy for mining is the same with our strategy for oil and chemicals: we approach the top ten companies in the world, we present them our capabilities in Iran, and, if they are fully committed, we can get them up and running in Iran next week.
*Mike Kantering is the Managing Director of Kantering B.V.