Iran has approached Afghanistan for working on a joint project to extract iron ore from a mine in the Afghan province of Herat, although the two countries are yet to reach an agreement.

Iran wants to transfer the extracted material to an ore processing plant on its soil across the border, but Afghanistan is opposed to the idea, according to a local Iranian media report.

The Sangan mine which Iran is interested to invest in is shared by the two countries, but Tehran has already started tapping its part of the reserves.

Earlier this month, Iran’s Ambassador in Kabul said the two countries had started talks on Iranian investment in Afghanistan’s mining sector.

Sangan has been branded as the ‘South Pars’ of Iran’s steel industry, drawing a comparison with the giant gas reservoir that straddles the territorial waters of Iran and Qatar.

According to Iranian state-owned mines and metals holding company IMIDRO chairman Mehdi Karbasian, of the 2.7 billion tonnes of iron ore reserves in Iran, one billion tonnes are in Sangan which has seen investments of $1bn.

In 2015, Karbasian said five domestic consortiums and another consortium comprising two Chinese and four Iranian firms had undertaken to provide investment.