Phosphate in Syria has been a source of tension between major world powers for years, with Iran and Russia in particular being interested in acquiring exploration and extraction rights and signing partnerships with the Syrian government.
This sparks inquiries into the state of Syria’s phosphate industry, the nature of Moscow and Tehran’s rivalry over the country’s natural resources and the motives behind the Iran-Russia interest in the Syrian phosphate sector.
Syria’s Phosphate Sector
Syrian phosphate is of medium quality and suitable for all applications, such as the production of phosphoric acid and nitrogen fertilizers of all types. In addition, it contains between 28 percent and 34 percent phosphorus pentoxide. After oil and natural gas ores, phosphate ore is Syria’s second most important sub-metallic and semi-metallic resource in terms of economic and strategic importance.
Syrian phosphate ore is found across the Palmyra mountain ranges (Khunayfis, Sharqiya, and Rakhim), the Hammad region (Al-Jafifa, Al-Thulaythiwat, Al-Sijri, and Al-Habari), and the coastal region (Ain Layloun, Ain Al-Tinah, Mahalibeh Castle, and Hamam Al-Qarahleh). Five phosphate factories exist in Syria, four of which are located in the eastern mines and one in the Khunayfis mines. The majority of Syrian phosphate is exported to several countries via the railways that connect mines in the port of Tartous, while a small portion is used internally in the production of phosphate fertilizers to be transported to the General Fertilizers Company in Homs.
Between 2008 and 2011, Syria’s phosphate exports ranked fourth or fifth in the world, with two-thirds of its phosphate production destined for export and thus providing a significant source of foreign currency revenue for the country. However, this pattern did not continue, as Syrian phosphate exports fell from more than $270 million in 2010 to $27 million in 2018. At this point, the amount of phosphate that has been mined accounts for less than 0.17 percent of the proven reserves. Although reliable phosphate reserves are thought to be two billion tons, production quantities are still below 3.5 million tons annually because of outdated equipment, a lack of modern technology, a lack of funding, poor management, the effects of the Ukraine war, and the extensive damage done to the water and electricity infrastructure.
Motives for the Russian-Iranian Rivalry over Syrian Phosphate
According to a debt settlement agreement between Syria and Russia, which lifted about 73 percent of the Syrian debt amounting to about $13.4 billion, Russia now controls the production of phosphate in Syria through the Stroytransgaz company, which has been operating in Syria since 2005, to control the port of Tartus and the government-run fertilizer factories. This has made it possible for Russia to maintain a monopoly on the mining and processing of phosphates from the mines and fertilizer factories in Homs governorate to the export port in Tartous.
Stroytransgaz is using Syrian engineers and skilled laborers under Russian supervision to restore phosphate factories in the areas of Sharqiya and Khunayfis. In 2018, the company was granted a 50-year monopoly to sell 2.2 million tons of phosphate annually, with the state-owned General Establishment of Geology receiving only 30 percent of the profits. One year after this agreement was reached, the Syrian government signed two more contracts with Stroytransgaz to have them oversee operations at the General Fertilizers Company in Homs and the port of Tartus. In accordance with the first contract, which the Syrian parliament approved in February 2019, Stroytransgaz is required to invest $200 million within two years in order to renovate the General Fertilizers Company’s three old factories, allowing the former to benefit from a share of roughly 65 percent for 40 years. The second contract calls for an investment of $500 million to build and expand Tartous port. It didn’t end there. Following the withdrawal of the Iranian militias, Russian forces imposed their control over the Al-Sawana phosphate field, east of Homs, and bolstered their forces with numerous members of the Al-Quds Brigade and the Fifth Corps.
This is relevant given the conflict and rivalry between Russia and Iran, the latter of which is attempting to exert military control over the main phosphate mines in Syria, particularly the eastern ones, in order to gain as much as possible from the wealth of phosphate. Historically, the first relevant agreement between Syria and Iran was signed in 1974, and it centered on the export of phosphates by Syria and transport vehicles by Iran. In a parallel agreement, which the two countries signed in 1982, Iran agreed to export 9 million tons of oil to Syria each year in exchange for importing 400,000 tons of phosphates. By January 2017, the two governments had signed memoranda of understanding granting Iran the right to mine the Sharqiya field near Palmyra for phosphates. However, six months later, the Syrian government granted Stroytransgaz an exclusive contract to extract and sell phosphates from the same mine, and as a result, the Iranian government was dissatisfied with the contracts Syria had signed with Russia, which limited its ability to profit from Syrian phosphate.
Besides Russia and Iran, Serbia entered the line of competition, where the General Establishment for Geology and Mineral Resources and the Serbian Womco Associates Doo signed an agreement to extract phosphate from Syrian lands and export it to Serbia, which will benefit from 70 percent of the net production, while Syria will benefit from the remaining 30 percent. Hence, Syria’s phosphate has been the subject of international interest for several reasons, including:
• Economic and Geopolitical Gains: By approving investment contracts for their major companies and conglomerates and by controlling investments in various economic projects, especially energy and phosphates, Russia and Iran seek to play a greater role in the Syrian economy, which may represent a vital and strategic economic corridor towards the global market. This usually comes at the expense of the Syrian state, which loses between 70 percent and 75 percent of the revenues from phosphate exports and the revenues from telecommunications.
However, there are a few roadblocks in the way of Russia reaping the full benefits of Syria’s phosphate, such as the presence of phosphate mines in dangerous areas, and the fact that the Russian investor must contend with the pervasive corruption, nepotism, and featherbedding that characterize the three state-owned companies. However, there are a few roadblocks in the way of Russia reaping the full benefits of Syria’s phosphate, such as the presence of phosphate mines in dangerous areas, and the fact that the Russian investor has to deal with issues like widespread corruption, nepotism, and featherbedding that are present in the three state-owned companies. Additionally, Stroytransgaz has experienced a rise in complaints from Syrian employees. Despite Stroytransgaz’s assurances to preserve workers’ rights as employees in the public sector, including their salaries, incentives, free transportation, health, and social insurance, there have been numerous protests and labor strikes at the General Fertilizers Company and the port of Tartous in 2019 and 2020 due to working conditions, declining wages, and the central administrative approach imposed by the Russian administration to deal with Syrian managers and workers. Worse, by June 2019, Tartous port employees were presented with new contracts that reduced some of their rights, and any employees who declined to sign due to their dissatisfaction with the terms or because of administrative challenges were fired.
Iran’s intervention in Syria may allow it to tighten its economic grip on Turkey. The Syrian economy represents a potential market for Iranian goods, and Iranian economic involvement in Syria would increase the influence of its regional Syrian allies. The Iranian agricultural sector depends heavily on imports of Syrian phosphate because the country’s phosphorus-deficient soil necessitates their importation. As such, the Iranian government aims to supply phosphate to the country’s agricultural sector, which is primarily plagued by a number of serious issues, including poor soil conditions marked by high salinity, declining seed quality, a lack of skilled farmers, a lack of agricultural inputs, the lack of foreign investment in the agricultural sector, the conversion of arable land to non-agricultural uses, an excessive use of chemicals and pesticides, and inefficiency in the water distribution system, in light of due to successive governments’ habit of prioritizing the income-generating energy sector over the agricultural and food sector. Due to this policy, crop yields declined and the Iranian government was unable to achieve its goal of being self-sufficient in basic foodstuffs. Tehran still imports food, putting its food security at risk, especially given the country’s ongoing population growth.
• Compulsory Compensation: Russian and Iranian involvement in the Syrian phosphate sector stems from the countries’ shared belief that the sector’s wealth will help offset the costs of their respective support for the Syrian government. According to a US State Department report, Iran alone invested more than $16 billion in Syria between the years of 2012 and 2020. As a result, Tehran obtained guarantees from Damascus that it would pay back its loans by establishing a joint venture that would oversee the extraction and export of phosphate. On the other hand, Russia offered humanitarian assistance, particularly food, and since 2020, Moscow has given Damascus access to about 100,000 tons of wheat.
• Comparative Advantage: One possible reason for Russia’s interest in Syrian phosphate is that it contains a relatively low amount of cadmium, a carcinogenic element. Given that it now controls a significant portion of fertilizer imports into the European Union, which set limits on the amount of cadmium waste that could be imported in phosphate fertilizer, Russia is attempting to gain an advantage over Syria by reducing the risk of toxic chemical elements being present in phosphates that are exported to European nations. Additionally, Syrian phosphate contains high levels of phosphorus pentoxide—more than 30 percent—as well as radioactive gases like uranium, thorium, and molybdenum. This suggests that Russia wants to diversify its phosphate sources while also gaining access to low cadmium and high uranium concentrations.
In this light, it appears Iran and Russia are eyeing Syria’s phosphate sector to make economic, political, and geostrategic gains, recoup the costs of supporting the Syrian government, and take advantage of the Syrian phosphate’s leverage.
