TEHRAN – Being among the world’s top mineral-rich countries, Iran has set a new target for further development of its mining sector as the country’s economy is moving away from oil toward becoming oil-independent.

Iran is one of the top 10 mineral-rich countries in the world in which 68 types of minerals have been identified so far, including the world’s largest deposits of copper, zinc, and iron; so there are numerous large, medium and small-sized mines across the country that are being operated by the government or the private sector.

Recently, however, due to the obstacles created by the U.S sanctions, many of the small and medium-sized mines which are mainly owned by the private sector have been facing serious problems regarding the overhaul of their machinery and equipment and even exports of their products, so that several small mines have been forced to reduce their production or even completely shut down.

Among the major issues that the mining sector is currently facing, financial problems and resource limitations are the most severe ones.

In this regard, the government has urged the Industry, Mining and Trade Ministry to take necessary measures for supporting such mines to get back on their feet and start operating again.

The main solution that has been offered for the mining sector is for mines to enter the capital market and offer their shares to raise fund for developing projects and resuming their operations.

To learn more about this, the Tehran Times interviewed Bahram Shakouri, the chairman of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA)’s Mines and Mining Industry’s Committee.

What follows is the gist of the discussion.

The reviving program

Asked about the situation of small and medium-sized mines in the country and the new proposal for listing such mines on the stock market, Shakouri said: “Small and medium-sized enterprises (SMEs) constitute a big part of every nation’s productive sector and obviously they play a very significant role in Iran’s economic growth and development as well.”

In the mining sector, 98.3 percent of the country’s mines are operated by SMEs, none of which are currently listed on the stock market, he added.

Since many of such SMEs have been forced to shut down in the current economic situation, the government felt the need for a comprehensive program to revive such mines, so the Industry Ministry was put in charge of the implementation of the project for reviving idle mines.

Later on, the program kicked off and a working group comprised of representatives from Iran Mine House, ICCIMA Mines and Mining Industry Committee, Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), Industry, Mining, and Trade Ministry, Geological Survey and Mineral Explorations of Iran (GSI) and Iran Minerals Production and Supply Company (IMPSC) was established.

“In this program, idle mines are identified in coordination with the related bodies in various provinces and some sort of diagnostic procedure is carried out for them in order to identify the reasons for their situation.”

The main issue and the solution

According to Shakouri, the reasons are mainly categorized into five groups including financial problems, technical problems, infrastructure issues, problems related to licenses and permit issuance, and finally the lack of enough reservoir.

One of the major issues that over 50 percent of the mentioned mines were facing was financial issues, therefore the capital market could be a great opportunity for such SMEs to attract investment for financing their projects, the official said.

Now, nearly two months after President Hassan Rouhani’s announcement regarding the need for small mines to enter the stock market, the working group has also been tasked to explore the capital market’s capacities for the mining sector and to start the process for small mines joining this market.

“We can direct the great resources that are flowing into the capital market toward the mining sector in order to develop this area and push it further toward productivity,” Shakouri said.

According to the official, a big part of the public capital which has been attracted into the stock market is practically idle and is not used for promoting productivity, so by redirecting it toward more productive sectors like the mining industry it could play a significant role in the country’s economic growth.

In this regard, the Securities and Exchange Organization (SEO) and the government should offer special programs and support packages for SMEs in the mining sector to make them able to enter the capital market, he stressed.

“This plan is a very good one which can lead to more productivity, more job creation, and of course more revenues for the country if it is implemented correctly.”

EF/MA