Due to bypassing bureaucratic formalities, this privilege paved the
way for the projects to take advantage of the National Development Fund.
In addition, in the aluminum sector grounds have been prepared to open
an LC for the largest 300 thousand ton project for production of this
strategic metal in Iran. Other projects such as Gol Gohar 5 and 6 mass
mines (separately), two coal projects in Tabas, extraction of magnesium
from salty waters of Qom, Khomrud coal package and Zarand coke
production no more face the financing challenge because investors from
the private sector have entered the scene.
In the meantime, the graphite electrode contract which enjoys a
special place in the steel industry reached the operation stage after
about 12 years. Mahdiabad zinc mine (near Yazd) which was idle for long
years was activated. Mahdiabad is well known as one of the world’s
largest zinc mines.
Also, Venezuela cement, development of the Persian Gulf Special
Zone platform, Sangan concentrates and pelletizing, titanium pilot and
processing unit, antimony, Khuzestan green coke, Tabas Project No. 4,
Savadkuh coke production and coal washing, Kordabad coal, Nama
500-megawatt power plant, Oxin power plant and two infrastructural
projects in energy-consuming special zones known as Bar and Shurabe
Tarud are among other projects which have been activated since last
fall. Iranian Mines and Mining Industries Development and Renovation
Organization funded 700 billion rials for activating of these 30
projects in the second half of the past calendar year.
The two points that need to be acknowledged here are: in the first
instance, the projects were activated in less than one year under
collective wisdom and management and the presence of investors rather
than by rejecting the debs. This is tantamount to realization of the
main goals of the country’s macro policies in transferring the affairs
to the private sector and with regard to ‘resistant economy.’ Secondly,
in the course of diversification of financing resources, the
organization was able to attract companies for investment in this field
which were earlier absent. For example, for the implementation of $1
billion worth Sangan concentrates and pelletizing project 29 investment
groups entered the scene of rivalry which, according to the managers of
the companies, had been attracted to the mining sector for the first
time. This is indicative of the projection of this part of the economy’s
attractions for profitmaking and its common interests for the
investors: Attractions that seem to have been neglected in recent years
and this is a point that was raised during negotiations with foreign
companies.
Unfortunately, with the escalation of the economic sanctions
imposed on the Iranian economy, little information was disseminated
about potentials existing in the mining sector and many foreign
companies mentioned this gap. But with the windows opened in the macro
policies of the country under the 11th government, large European,
Indian and Chinese companies were encouraged to cooperate in this
sector. In fact, existence of rich mineral resources, abundant energy,
access to open seas, neighborhood with 14 countries and skilled and
inexpensive workforce are indicators that have not been ignored by the
experts.
Development of Infrastructures: Iranian Mines and Mining Industries
Development and Renovation Organization by taking advantage of these
indicators, while reducing the financial costs, implemented projects for
the development of energy-consuming industries zones in the south of
the country and by defining and launching new development projects
embarked on their expansion.
At present, Parsian energy-consuming industries zone in Hormuzgan
Province and Lamerd in south of Fars Province which have been activated
recently, are engaged in implementing infrastructures for the
establishment of industries such as aluminum, steel, cement and
petrochemicals.
These areas because of their proximity to Assalouyeh, the gas
capital of Iran and the world, enjoy proper conditions for the import of
raw materials as well as for exports. Also, in line with the new
government’s plans and IMIDRO’s programs for production of competitive
and export-oriented goods, parts of the energy-consuming industries
would be established in Chabahar in Sistan-Baluchestan Province. Already
partners of a three to five million ton steel project have been formed
in Chabahar and works have been directed in the executive direction.
Meanwhile, with the partnership of Indian and Kuwaiti investors two
major steel projects with a total capacity of more than five million
tons will go on stream in the Persian Gulf Special Mineral Industry Zone
(Bandar Abbas).
This outlook in fact not only entails production growth but
development of employment, using skilled and educated workforce,
balancing development, increasing per capita income and, development of
non-oil exports while gas energy will enter into the industry domain and
generate high added value.
In fact activating of projects in the field of mines and mineral
industry is promising dynamism of this sector of economy for domestic
and foreign investors. It is considered a factor for encouraging
investors. Currently, foreign investors are negotiating with IMIDRO
every week in order to find a foothold in these projects.
However, one cannot ignore the obstacle that has already been
thrown on the path of foreign cooperation; an obstacle which due to
banking sanctions has irritated the investors. Nevertheless, foreign
companies have maintained their cooperation in various forms but in the
field of investment they have been able to make the preliminary
arrangements and are waiting for the sanctions to be lifted.
Attraction of Domestic Investments:
Under these circumstances, IMIDRO has focused on taking advantage
of the financial potentials of the private sector, investment firms and
domestic holdings. In addition, attraction of the capitals of Iranians
residing abroad is considered to be another part of the organization’s
programs.
Meanwhile, since the beginning of the last fall up to now measures
have been taken for the receipt of the arrears of the organization with
regard to the transfers and beneficial interests of mines extraction
and mines production in order to maintain resources for commissioning of
the projects. Although the sums were not consistent with the financial
needs of the organization but could meet part of the demands.
On the other hand, reference should be made to a point that has
paved the way for financial challenges of IMIDRO in execution of the
projects. The organization has more than 30 priority projects under
implementation and the required amount for their operation is over 240
thousand billion rials. To overcome the financial bottleneck of these
projects, the issue of using the financial capability of domestic
companies was pursued which proved to be fruitful. In less than a year
the fate of 85% of the figure was decided through private sector
partnership. Thus the financial load of IMIDRO in this respect was cut
to 37,000 billion rials, which entails speedy execution and acceleration
of the progress of the projects. This achievement has been made after
holding more than 40 meetings of the Investment Committee and review of
all the projects which is the outcome of collective work of all managers
and experts of IMIDRO.
Exploration: Exploration has been one of the operational aspects
of IMIDRO in the past nine months and the plan was quickly put into
force by conducting follow-ups. Cooperation with the Geology
Organization and Minerals Directorate of the Ministry of Industry, Mines
and Trade was such that a plan was devised for the exploration of 200
thousand square kilometers of the Iranian land. It was launched in the
early days of last winter and heated up the activities of the mining
sector.
Sangan in Khorasan Razavi Province was the first destination of
the new exploration program; a place which is known as the Eastern
Assalouyeh in the field of iron ore. Exploration at this level covered
12 thousand square kilometers and gradually spread to South Khorasan and
Sistan-Baluchestan provinces. So far 68 thousand square kilometers of
the area has been brought under exploration activities and the figure is
expected to reach 100 thousand square kilometers by the end of this
year. New explorations are expected to cover other areas with mineral
capabilities in addition to the eastern borders of the country.
This project has been planned with an aim of ensuring supply of
raw materials for the development of mines and mineral industries.
Gaining access to the targets of the Vision Plan (2025) for the
development of the country in this field necessitates possession of the
required minerals for the steel, copper, aluminum, lead, zinc, gold,
coal and even rare earth elements (REE). Therefore, such a massive
program has been fulfilled in the field of exploration; a program which
needs 12000 billion rials and is expected to explore twice as much as
what was explored over the past 100 years.
Mining Insurance Fund: On the other hand, targets of the mining
sector can proceed in a balanced form at a time that they enjoy the
required support in order to boost the incentives for the attraction of
investment. One of the factors which strengthen the position of the
Insurance Fund is investment in mining activities. In the mentioned
period efforts were made so that the capital of the Fund increased
fourfold from 500 billion rials to 2100 billion rials. Simultaneously a
budgetary fund was allocated to this supportive body of the mining
sector for the first time in the calendar year 1393 (started March 21,
2014).
In the meantime, IMIDRO by signing a 3600-billion-rial memorandum
of understanding with two major domestic banks (Mellat and Tejarat)
decided to put facilities for the purchase of mining equipment at the
disposal of mining companies and contractors; facilities which covered
80% of the costs of the purchased machinery.
If we want to take a glance at the entire measures taken by the
organization in less than a year, we can focus on the fact that
IMIDRO’s total performance is based on the change in attitude of the
government, including the Ministry of Industry, Mines and Trade, and
IMIDRO in particular. On this basis, the organization conducted a
review and evaluation of targets ahead through compliance with macro
policies stipulated in Article 44 of the Constitution, the ‘resistant
economy’, strengthening the private sector and growth and promotion of
the mines and mineral industries in the national economy.
The most important principle in the organization was to focus on
strategy with regard to the above-mentioned macro issues. Updating
exploration plans along with renewed formulation of the comprehensive
steel, copper, aluminum, gold, lead, zinc plan and rare earth elements
are the most prominent effects in the revision of the strategy.
Software Domain: Other tasks that lay the foundation for future
development and competitiveness of this sector are related to the
software domain. They include the following: Compilation of IMIDRO’s
Sixth Plan and updating comprehensive plans for steel, copper, aluminum,
magnesium, etc., development of new mineral industries and super
alloys, transfer of coal mines extraction to private sector applicants,
processing Jalalabad iron ore mines wastes, monitoring execution of the
second phase of targeted subsidies, strengthening non-governmental
specialized associations, conducting studies on development of coal
mines and its new applications in the industry, and developing energy
consumption standards.
Government Pays Special Attention to Mining Sector: With regard
to the sessions that have been held with the government, different
aspects of the development of the mines and mineral industry sector were
outlined and the position of this area in the main body of the
government was made transparent; that is the major and minor role this
sector plays in the economy. To this end, the government and the
President himself are aware of the generalities of the effectiveness of
the mines and mineral industry sector to such an extent that a special
support has begun for mines sector. The first vice-president’s support
for this sector has prepared the ground for the mines sector to come out
of recession.
Meanwhile, IMIDRO was asked to submit its proposals in this
regard which it did. These proposals were forwarded to the government
which comprised seven items concerning mines and mineral industry. In
addition, the Islamic Consultative Assembly (Majlis) and the speaker of
the parliament have announced their support for the development of this
sector.
One IMIDRO request is for the National Development Fund to
allocate credits for development of mines and mineral industry projects.
These factors are considered prerequisites for the development of this
sector especially that in order to compensate for the shortcomings of
the recent years we should concentrate on economic leap. The reason is
that targets which had been presented in the past 10 years for gaining
access to Horizon 2025 were faced with obstacles which made achievement
of those targets difficult.
One of the measures the Islamic Consultative Assembly took in
this direction was the approval of allocation of 70% of the shares from
transfer of the stocks of the organization for operation and development
of projects in this sector. This measure is in contrast with the
performance of previous years when stocks of IMIDRO companies were
unilaterally transferred without the return of their sums to the
development cycle of the mines sector. But since the second half of the
last year programs have been fulfilled with the continuation of which
plans under implementation gradually entered the production cycle.
The most important of these plans are provincial steel projects
to such an extent that the sponge iron section of these projects is
expected to become operational by the end of the current calendar year
(March 21, 2015). Among the projects underway Zarshuran gold with a
production capacity of three tons per year is considered the biggest
gold bullion producer in the country.
One of the key issues in the progress of micro targets in this
area is paying attention to the development organizations in the
country. The necessity of the status of such organizations has been
proved in developed countries such as Japan and the United States. These
organizations in fact found and pave the way for development conditions
and capabilities of the private sector. Now, considering the special
outlook of the government concerning this principle, a bright horizon
has been portrayed before the mines and mineral industry sector for
accomplishing its micro goals.