TEHRAN - Australia has had continuous bilateral relations with Iran since it opened an embassy in Tehran in 1968. Similarly, Iran opened its embassy in Australia in 1971. For much of the period following the 1968 opening of Australia's embassy in Tehran, Iran was Australia's largest trading partner in the Middle East and the ninth largest overall.

This has not been the case in recent years.  Sanctions have hindered the two counties’ ability to trade with each other.  Hopes were high in 2015 that trade would increase with the signing of the JCPOA.  Australia’s then Foreign Minister, Julie Bishop, visited Iran with a delegation from Australia in 2015, and the Tehran Times interviewed Dr Mahmood Khaghani, an Iranian International Energy Expert, and Sam Barden, an Australian Businessman, from SBI Markets at the time. https://www.tehrantimes.com/news/246124/Market-for-Australian-companies-in-Iran-is-wide-open-experts  

Mr. Barden and two other senior members of the SBI Markets team, Mr. Jason Foley, and Mr. Jeremy Barden, are currently in Tehran assessing the opportunities for reigniting Iran-Australia trade relations.  The Tehran Times caught up with the SBI Markets team and asked them the following questions:

Tehran Times:  Welcome to Tehran.  SBI Markets has been coming to Iran for many years.  What is different with regards to business opportunities today compared with the past?

SBI Markets:  The world is changing, and fast.  As a consequence of President Trump withdrawing from the JCPOA, US sanctions were re-imposed, and made it difficult for counterparts, including Australia, to conduct open business with Iran.  New global structures are progressing to accommodate alternative trade routes and settlements.  The world is moving from a unilateral system to a multilateral system, and this is being expressed in trade, through evolving multi-currency frameworks.  We are seeing BRICS countries and friends moving towards a “BRICS Currency”, we are seeing Persian Gulf Nations trading oil in Chinese Yuan on the back of Chinese brokered peace initiatives, and the general increase in bilateral trade settling directly in domestic currency, and not necessarily through the USD banking system.  USD reserves have fallen from 75% to just below 50% today.  Added to this, Iran and Saudi Arabia are re-establishing diplomatic ties, the UAE has openly stated they are increasing trade with Iran despite sanctions, and of course the Sultan of Oman, who has traditionally maintained close ties to Iran and the USA, recently travelled to Iran for the first time in 10 years.  The region wants peaceful, productive trade, not war.  This means that the JCPOA, or something similar will have to be signed, if the US, Europe and Australia, want to participate in peaceful trade relations with Iran in the region.  We believe and hope this is a possibility again.

Tehran Times:  If this is the case, and Australia can open transparent trade with Iran, where do you see the initial opportunities of cooperation?

SBI Markets:  Given that sanctions have been in place in one form or another for 45 years, the market for Australian companies in Iran is wide open. The obvious low hanging fruit would be cooperation in establishing joint ventures in hydrocarbons and mineral extraction in the region. Similarly, Australia is experienced in delivering large-scale administrative, health, educational and government service sector projects. In relation to bilateral trade, Australia and Iran have many opportunities in the agricultural sector, from fertilizer, meat, nano technology, breeding technology and more.  Australia and Australian brands are sought after in Iran, so clothing, cosmetics to name a couple could find a new and vibrant market here.

Tehran Times:  That’s a lot of opportunity.  In terms of mineral extraction, could you be more specific?

SBI Markets:  As global markets transition to a low carbon economy, the demand for key inputs for batteries and battery storage, collectively Battery Minerals, is growing.  Iran holds some of the best reserves of battery minerals and can contribute in no small part to the global supply chain.  Recently, Iran announced what could be the world’s second largest lithium deposit in Hamedan.  Australia is currently the largest supplier of lithium to markets and has advanced technology which could add significant value to Iran’s Hamedan deposit in a JV scenario.  Australia also has the potential to produce Graphite, the other key ingredient for Lithium-ion batteries, and Australia’s capital markets could be a good source of exploration and extraction funding in the future to deliver batteries in partnership with Iran to support Electric Vehicles and grid scale battery storage for the low carbon energy transition.

Tehran Times:  You mentioned capital markets.  How do you see the potential for investment into the Iranian capital markets?

SBI Markets:  Iran has highly regulated and well-structured capital markets and commodities exchanges.  The only problem is they are disconnected from foreign direct investment…for now!!!  Tehran Stock Exchange (TSE) has companies from a wide range of industries, including automotive, telecommunications, agriculture, petrochemical, mining, steel iron, copper, banking and insurance, to name a few. Many of the companies listed are state-owned firms that have been privatized.  The TSE has more than 350 companies listed with a combined market capitalization of $150 billion USD equivalent and is considered an Emerging Market.

The Iran Mercantile Exchange, IME, trades $14 billion USD equivalent across agricultural, metal and mineral, oil and Petro chemical products handling 26 million tons of commodities per annum into the local and regional markets.  The opportunity for growth across these platforms is significant.  The established platforms and regulatory frameworks already in place will lower counterparty and settlement risk, drive transparency and increase liquidity and value.

Tehran Times:  How have Iranian people reacted to you being in Tehran?

SBI Markets:  As always, the Iranian people have welcomed us with warm, open, and friendly smiles.  We appreciate this as Australian culture is the same.  Australia is a multi-cultural country, and we have many Iranian/Australians contributing to our society, not least in our university sector as students and professors.

Tehran Times:  Thank you. 

SBI Markets:  It is our pleasure and thanks to you.

Caption: Jeremy Barden, (left), Sam Barden (center) and Jason Foley