The reserves were discovered recently at a depth of 1,500m, Director General of Industry, Mine and Trade Department of Yazd Province Mohammadreza Alamdar-Yazdi said at a news conference, Press TV reported.
Describing the mine as unique in the world in terms of reserves and iron content, he said it will help the capacities of Yazd and Iran in general in a huge way since the country's total reserves of iron ore, the main component in steel making, exceed three billion tons.
"Altogether, 90 percent of Yazd Province is mineral-rich with 28 promising and significant areas explored so far," he said.
Iron ore reserves of Gol-e Gohar in Kerman Province in south-central Iran are one of the biggest in the world yielding up to five million tons a year.
Iran is also advancing a massive steelmaking project in the country's east which is being promoted as the 'South Pars' of the steel industry. Sangan, which is estimated to hold 1.2 billion tons of iron ore, will be developed with an initial investment of $2 billion.
Iran's steel sector is up for a surge in the next eight years with the country targeting exports of 20-25 million tons. It exported four million tons of steel last year, according to Director of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) Mahdi Karbasian.
Currently, 16 million tons of steel are produced in Iran, the bulk of which is consumed domestically.
Iran is the Middle East's biggest carmaker and steel is strategically important in view of its massive oil and gas industry, transportation network, water supply, urban centers and mammoth construction.
Karbasian had said Iran planned $29 billion in investment in the mining sector, of which $15 billion is expected to be provided by foreign investors.
The country is courting international prospectors into a sector which boasts some of the world's most stupendous riches but remains vastly underdeveloped under the shadow of its sprawling oil industry. The projects include production of aluminum, steel, rare earth elements, copper, gold and coal.
Iran possesses seven percent of the world's total mineral reserves worth about $700 billion, including the world's largest deposits of copper, zinc and iron ore, but officials say this figure could rise to $1.4 trillion with new discoveries. Most of the mineral reserves are located in the provinces of Kerman, Yazd, East and West Azarbaijan and Golestan.
Incomplete iron ore projects such as concentration, pelletizing and sponge iron production are a priority, with exports expected to stop from 2019.
The plan is in line with Iran's bid to move toward processed products and do away with the sales of raw materials, added Karbasian.