Enab Baladi – Omar Alaa Eldin

The Ministry of Oil in the interim Damascus government repeatedly announces tenders for investment in the phosphate sector, which represents a Syrian wealth estimated at reserves of 1.8 billion tons according to most estimates.

On February 12, the Syrian Ministry of Oil announced an auction to sell 175,000 tons of wet phosphate from the phosphate mines in Palmyra.

Many countries show interest in Syrian phosphate, while Russia, through contracts with the former regime, has controlled a large part of this sector. What is the reality of this wealth today, where does it go, and how can it help support the national economy?

The story of Syrian phosphate 

Until 2011, Syria ranked fifth globally on the list of phosphate-exporting countries.

Phosphate is considered the second most important resource after oil and gas, according to a research paper published in the University of Damascus journal titled “Syrian Phosphate and Its Role in Economic Development.”

Despite advancements in exploration and production processes, they remain below the desired level in terms of studies, exploration, production, manufacturing, and exporting. The reliable reserve is estimated at two billion tons, yet annual production remains below 3.5 million tons.

According to the research paper, phosphate ore in Syria is distributed across the following areas:

• The Palmyra Chain (Khneifis, al-sharqiyah, and al-Rakhim).
• The Hamad area (Jafifa, Thalithawat, Sijari, and Habari).
• The coastal area (Ain Lailun, Ain Tina, Qalat al-Mahalba, and Hamam al-Qarahla).

The phosphate region, specifically the Khneifis and al-Sharqiyah mines, witnessed military clashes between the regime, Iran, and Russia, eventually leading to Russia’s control over those mines.

Phosphate’s contribution in the economy

Economic expert and head of the Economy and Homeland Foundation, Razi Mohi al-Din, believes that if Syria’s vast phosphate reserve is optimally exploited, it could become a major source of hard currency, generating revenue estimated in billions of dollars annually.

Mohi al-Din argues that correct exploitation of phosphate wealth can enhance local production chains by developing transformation industries such as phosphate fertilizers.

During his discussion with Enab Baladi, Mohi al-Din stated that any government aiming to utilize Syrian phosphate should adopt a clear strategy, first establishing security, stability, and civil peace, as these are crucial for the return of investment.

It should also implement attractive investment policies for local and international investors by providing incentives and investment guarantees, in addition to building strategic partnerships with specialized global companies in mining and manufacturing.

Mohi al-Din emphasized the need for a transparent legal and regulatory framework for the phosphate sector to ensure sustainable investment and prevent corruption, along with rehabilitating the necessary infrastructure for extracting, transporting, and processing phosphate.

He called for the establishment of transformation factories for phosphate fertilizers instead of merely exporting it as raw materials, which would multiply economic returns.

According to the economic expert, the best economic approach is to locally convert raw phosphate into phosphate fertilizers and chemical products, thus achieving greater added value and providing local job opportunities.

However, he clarified that the current possibility is to export it as raw materials due to the weak infrastructure of transformation and refining factories after years of war, while long-term investment in manufacturing is the strategic best option.

Mohi al-Din believes that the revenues from the mineral wealth sector can support the Syrian economy by directing part of the revenues toward infrastructure and investing in the local manufacturing sector by establishing fertilizer and chemical compound factories.

He confirmed the necessity of establishing a sovereign fund for mineral resources, whereby part of the profits is invested in sustainable development projects for future generations.

Who is investing today?

In March 2017, the regime signed a contract with the Russian engineering company “Stroytransgaz” (STG) to carry out the necessary maintenance work for the mines and provide protection, production, and transport services to the Selata port in Lebanon.

On March 26, 2018, the Syrian People’s Assembly under the former regime ratified an agreement signed between the General Establishment of Geology and Mineral Resources and the Russian Stroytransgaz company, which stipulated the investment of phosphate mines in Palmyra for 50 years, with an annual production of two million and 200 thousand tons, from a reserve of 105 million tons.

In recent years, phosphate has been a point of broader contention between Assad’s allies, Russia and Iran.

According to observations by Enab Baladi, the interim Damascus government has not issued any decision to cancel the contracts for the investment of phosphate mines with Stroytransgaz. Enab Baladi also attempted to contact the Ministry of Oil and Mineral Resources to ascertain if the agreement with Russia had been canceled, but there was no response at the time of writing this report.

On December 8, 2023, the former prime minister, Hussein Arnous, requested a review of the contract with Stroytransgaz concerning phosphate plants in Homs.

Arnous also demanded to “explore alternative options,” which clearly indicates that the government was then moving towards canceling the contract, according to the local Hashtag Syria website.

After the fall of the Assad regime on December 8, 2024, the controversy surrounding the Russian company resurfaced, as Reuters reported on January 24 that the interim Damascus government had canceled the agreement with Stroytransgaz (STG), which manages and operates it under which the Russian company runs the port of Tartus.

The Saudi Asharq Al-Awsat newspaper reported a Russian diplomatic source stating that Stroytransgaz is a private company, not a government one, and its assets are equally divided between Russian and Syrian partners, thus the Russian side owns 50% of its shares, while the other 50% is owned by one of the Qaterji Group companies close to the former regime.

The Russian diplomatic source added that “the action taken by the interim Syrian leadership was necessary, and it will apply to all projects in Syria that were contracted under the guise that these are projects between the previous Syrian and Russian governments, but in reality, they were arranged through private companies and capital of associates of the Assad family.”

The diplomatic source indicated that Russia has no fears regarding the future of Russian-Syrian agreements and joint projects in Syria, and that the majority of these projects in recent years are private, and it is up to the Syrians to decide their fate.

Russian-Iranian conflict

Syrian researcher Socrates al-Alou discussed in a research paper the Russian-Iranian conflict over Syria’s phosphate wealth.

The paper concluded with several findings, the most notable being that the economic importance of phosphate in Syria has made its mines a top contender among Syrian resources that could compensate Russia and Iran for their costs in supporting the Assad regime’s survival. In addition to the economic significance of Syrian phosphate, its richness in uranium and the possibility of its military applications enhance the competition between Russia and Iran for control over Syria’s reserves of it.

Al-Alou believes that Moscow has found in the Syrian regime’s previous need for its support a good opportunity to revive its old ambitions concerning Syrian phosphate and its uranium content, similar to Tehran’s nuclear aspirations.

Russia ranks third globally in terms of uranium reserves with 506,000 tons, yet it still lags behind Kazakhstan, Canada, and Australia in terms of production and export. Thus, acquiring potential uranium sources in Syria could enhance its competitive position as a global supplier of this rare commodity, which generates billions of dollars in trade annually, according to the Syrian researcher.

Iran out of the game

As for Iran, its scarce and low-quality uranium resources compel it to rely on external sources for obtaining natural and processed uranium, and Iran’s uranium reserves are insufficient in any case to cover its planned nuclear program, according to a report published by the Carnegie Center and the Federation of American Scientists in 2013.

However, in the end, the investments in Syrian phosphate went in favor of Russia instead of Iran.

Researcher Socrates al-Alou views this Iranian isolation from the wealth axis in the Syrian desert as not only a result of Moscow’s economic ambitions but also a part of American-Russian understandings following the Hamburg meeting between US President Donald Trump and Russian President Vladimir Putin.

These understandings led to opening the way for regime forces supported by Moscow and Tehran to control the desert area and reach Deir Ezzor, after the end of military operations and the clear delineation of influence maps between the United States and Russia in the Syrian desert and Deir Ezzor (sites of Syria’s underground wealth).

Potential investors

At the forefront of countries interested in Syrian phosphate are Gulf Arab states that are currently looking to expand their investments in Syria, according to economic expert Razi Mohi al-Din.

The expert believes that China is also interested in Syria’s natural resources as part of its strategy in the Middle East, along with Turkey, which seeks to benefit from Syrian minerals. Additionally, European countries and India could be interested if a suitable investment climate is provided.

Mohi al-Din thinks that Syrian phosphate could be a point of strength if exploited wisely, potentially giving Syria a strategic position in the global fertilizer market and becoming a major source of hard currency. It can also represent a negotiating card with major powers that require phosphate and uranium.

The phosphate card can be used in international partnerships as a means to attract investments and reduce economic isolation.

However, according to Mohi al-Din, this depends on the existence of a participatory government based on competencies, building a transparent management system, and a sound investment strategy to ensure that it is not exploited by external parties without maximizing the benefits for Syria and its people.