Anglo-Australian miner Rio Tinto said on Wednesday it was pulling out of the Sari Gunay gold mining project in western Iran after deciding it was not commercially viable.
Before conducting feasibility studies, Rio Tinto's exploration manager in Iran last year estimated the mine in the western province of Kurdistan could produce 4 million tonnes of ore per year over 12 to 18 years.
"I can confirm that Rio Tinto will be withdrawing from the Sari Gunay gold mine in Kurdistan," said a spokesman for Rio Tinto in London. "After feasibility studies we have concluded that the reserves at the mine are too small to justify continuing with the project," he added.
New foreign investment projects in Iran have come to a virtual standstill due to a mixture of political and commercial concerns. A Renault carbuilding venture is a conspicuous exception to the trend.
Iran's Kurdish territories have been simmering with unrest for several months with intermittent street demonstrations, gun battles with the police and kidnappings.