Azerbaijan Aims for Industrial Diversification with $5.3 Billion Investment

Azerbaijan is embarking on a major industrial expansion, aiming to reduce its reliance on oil exports and create new revenue streams through domestic processing of mineral resources. The State Program for the Development of the Mining and Metallurgy Industry for 2027-2030 involves $5.3 billion in investments, with approximately 80% coming from non-budgetary sources.

The program's core philosophy is to transition from extracting raw materials to generating revenue through processing and manufacturing. For instance, the Dashkesan iron ore project plans to produce hot briquetted iron (HBI), a processed raw material used in steel production, which will be exported or used domestically.

Azerbaijan also aims to increase its non-oil-and-gas exports, with the mining and metallurgy sector's export potential expected to rise from $1.3 billion to $3.4 billion by 2030, a 2.6-fold increase. The growth of processing sectors, such as aluminum, gold, copper, zinc, lead, and steel, can transform the structure of non-oil exports.

The expansion of green energy production in Azerbaijan, with plans to reach 6 GW of solar and wind energy capacity by 2030, may also impact the formation of new export products and domestic energy balance. This could create an opportunity to redirect natural gas from electricity generation towards exports and other industrial needs.