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Qabil Ashirov

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President Ilham Aliyev’s remarks at a meeting on September 22 on the “State Program for the Development of Mining (Metal Ores) and Metallurgical Industry in the Republic of Azerbaijan for 2027–2030” offer a clear indication of the sectors that could come to the forefront of Azerbaijan’s economic development in the next stage.

Azerbaijan has long been known primarily as an oil and gas country. The oil and gas sector remains highly important to the economy and is expected to retain that role in the coming years. In January-August 2026, Azerbaijan’s GDP stood at 87.7 billion manats, with 26.2 billion manats generated by the oil and gas sector, accounting for roughly 30% of total GDP.

These figures show that the objective is to expand other parts of the economy at a faster pace. As new sectors grow, the relative share of oil and gas in GDP and exports will decline, while the overall production base of the economy will become broader.

President Ilham Aliyev’s remarks indicate that metallurgy could play a particularly important role in this process.

As President Ilham Aliyev said: “Although it is a capital-intensive sector, a new, modern industrial domain will be established in our country. The creation of over 5,000 permanent jobs is envisaged. Overall, the processing and efficient utilization of our natural resources, alongside the full establishment of the production chain, will strengthen the national economy.”

The importance of metallurgy lies in the added value it can generate across several areas of the economy. Metal production provides raw materials and industrial inputs for construction, machinery, energy, transport, agricultural equipment and the defense industry. This makes the processing of ore into higher-value products far more important than simply extracting and exporting raw materials.

Azerbaijan’s metallurgical industry has not developed to its full potential for various reasons. One of the major obstacles was the occupation of mineral-rich Karabakh and surrounding territories by Armenia. Azerbaijan has now restored its territorial integrity, opening access to mineral resources that could not previously be fully utilized. The development of gold, copper and molybdenum deposits in Kalbajar, Aghdara and Zangilan is currently among the priorities. Geological exploration is also expected to expand in Nakhchivan.

The President has stressed that if significant new deposits are discovered, exporting the resources as raw ore would be a mistake. The greater economic value lies in establishing processing facilities and developing a complete production chain inside the country.

The establishment of the West Industrial Park is important in this context. According to the President, its main purpose is to develop the mining industry. Projects related to the Dashkasan ore deposit are expected to include ore beneficiation, pelletizing and hot-briquetted iron production, creating a production chain that extends beyond the extraction stage. Azerbaijan also aims to increase aluminum production to 100,000 tons by the end of 2030.

The development of metallurgy could also change Azerbaijan’s export structure. In January-August 2026, the country’s total exports amounted to $21.8 billion, while non-oil and gas exports stood at $6.2 billion. This means that around 70.5% of exports were still generated by the oil and gas sector.

The key issue is not a decline in oil and gas exports. If non-oil sectors grow faster, their share of exports will increase and the relative weight of oil and gas will fall. That would reflect the expansion of the overall economy rather than the shrinking importance of the energy sector.

Metallurgy could also have a major regional development impact. Economic activity in Azerbaijan has historically been heavily concentrated in Baku and Absheron. The concentration of jobs and income opportunities in the capital has encouraged migration from different parts of the country to Baku.

Mining and metallurgical projects in the regions could gradually change this pattern. The creation of more than 5,000 permanent jobs would have an economic impact extending beyond direct employment. New industrial facilities would generate demand for construction, transportation, logistics, services, retail and other businesses, creating additional sources of employment and income in the regions.

As President Ilham Aliyev said: “Over 5,000—and perhaps even more—new jobs will be created. The development of liberated Garabagh and East Zangezur, along with the growth of employment there, will proceed at a faster pace. Substantial funds will flow into the state budget in the form of taxes, and a robust export potential will be created.”

The scale of the projects is also significant. The President said the expected annual positive financial impact could exceed 1 billion manats.

Metallurgy, therefore, should be viewed as part of the expansion of Azerbaijan’s economic base rather than as a move away from oil and gas. The energy sector will remain important, while the growth of metallurgy, green energy and other non-oil industries can expand GDP, exports, employment and economic activity in the regions. Over time, this can reduce the relative weight of oil and gas in the economy through the growth of other sectors, rather than through the loss of importance of the energy industry.