Exploiting a loophole in Western sanctions, Iran is importing a high grade of refined alumina ore from several European countries including Germany and France that Tehran could be using to make armor parts and missile components.
Western measures imposed on Iran over its disputed nuclear program have hit many sectors of its economy including steel and other metals, where it is heavily dependent on imports. Tehran says its atomic work is peaceful.
The refined ore has been excluded from European Union sanctions, but tightened U.S. sanctions that came into effect on July 1 seek to close the loophole. According to a U.S. Treasury briefing, the latest measures will cover "raw or semi-finished metals" that include aluminum.
"After July 1, new sanctions will blacklist metals trade with Iran including aluminum, coal, steel, gold, silver and platinum amongst others, and should include alumina," said Mark Dubowitz, who has advised President Barack Obama's administration and U.S. lawmakers on sanctions.
Alumina is a refined version of the raw ore bauxite. It is typically used to make aluminum, but in its high purity or 'chemical grade' form, it has non-metal applications that have sensitive military uses.
As of July 1, however, the tightened U.S. sanctions might hamper the alumina trade with Iran as companies involved, who also have U.S. interests could be targeted by Washington.
"Any European companies found selling alumina, for example, will face the full weight of U.S. law. Alumina previously has sailed past the radar under previous U.S. and EU sanctions and should not be overlooked again as an important target of pressure," Dubowitz said.