Domestic Economy

Ministry Revokes Ban on Mining Machinery Imports 

More than 15,000 mining machineries in Iran over 20 years old need to be replaced
Ministry Revokes Ban on Mining Machinery Imports 
Ministry Revokes Ban on Mining Machinery Imports 

The ban on import of mining vehicles and machinery without domestic production has been lifted, a deputy minister of industries, mining and trade has announced.
“More than 15,000 mining machineries in Iran over 20 years old need to be replaced,” Reza Mohtashamipour was also quoted as saying by IRNA.
Noting that a part of the aging fleet may be repaired, he said the rest needs to be replaced through imports.
The deputy minister emphasized that the liberalization of imports only applies to machinery that cannot be produced domestically.
“The import of machinery that can be produced domestically still remains banned,” he said.
The ban on import of mining machinery has compelled Iran’s large mines to operate at 50% of their full capacity and pushed the country’s small- and medium-sized mines on the verge of closure, Hamid Reza Amirian, the deputy head of Iran Mine House, said earlier.
“This is a disaster for our mining industry. It’s been a few years since this ban has come into effect. The decision was made on faulty grounds to begin with,” he was quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture.
The official explained that after banning automobile imports a few years ago, the government placed mining vehicles in the same category. 
Mining companies cannot import 100-ton and 150-ton dump trucks and 200-ton and 300-ton loading machinery.
“Officials say the reason behind this ban is to support the domestic production of these machinery, whereas there is no such thing as domestic production of most mining machinery. These heavy machineries are produced by only six or seven companies worldwide. Under the current circumstances, we cannot become a producer,” he said.


The import of machinery that can be produced domestically still remains banned

Mohtashamipour noted that there are 5,000 abandoned mines and 3,000 gravel and sand mines that need machinery to be able to resume operation. Our local production cannot even meet 10% of their demand for machinery.
Noting that economic sanctions imposed on Iran don’t allow the import of new machinery, the official said, “We can only purchase secondhand ones, which too is not allowed because we have ‘sanctioned’ ourselves.”
Hesameddin Farhadi, the head of Mining Commission with Isfahan Chamber of Commerce, noted that due to the ban, Iranian miners have had to purchase mining machinery at four times the global price.
“A secondhand loader is priced at around $115,000 in the international market but due to the shortage of this heavy machine in the domestic market, we have to purchase it for 130 billion rials [around $400,000],” he added.
According to the official, most of the mining machinery used in Iran today were imported in the fiscal 1985-86, which has decreased efficiency in the mining sector by 50-60%.
“Mining machinery are means of production, yet officials in the Ministry of Industries, Mining and Trade have placed them in the same category as luxury goods. Due to a shortage of foreign currency reserves, instability of the economy and efforts to lend support to local production, imports of luxury cars have been banned and the same was imposed on mining machinery and vehicles. These officials need to reconsider their decision and exclude means of mining production from the regulation,” he said.   
Mehrdad Akbarian, the deputy head of the Mines and Mineral Industries Commission of Iran Chamber of Commerce, Industries, Mine and Agriculture, has said the mining sector currently needs to be supplied with 25,000 machines and vehicles.
“Over the years, two factors have impacted the price of mining machinery. One is the depreciation of Iranian rial against the dollar and the other is the shortage of these machines in the local market. The latter has made matters much worse. If a machine is valued at, for example, $80,000 in the international market, you cannot buy it for less than $160,000 in Iran, because the options are very limited,” he added. 
Referring to a decline in mining investment, Akbarian said the industry is facing a series of problems these days, but the ban on imports is the most pressing issue.
“Not all countries set up production lines to meet demand. They purchase them from global brands and instead, launch businesses offering sales services, spare parts and maintenance,” he added. 
According to Alireza Baqeri, the head of the Mining Commission of Birjand Chamber of Commerce, around 20 years ago, Heavy Equipment Production Company (HEPCO) made strategic mistakes in its decisions and planning in a way that it came close to bankruptcy a few years ago. 
“Because the government wanted to bring it back into the game, it banned the import of mining machinery,” he added.
HEPCO is an Iranian corporation that manufactures construction equipment, railcars, trucks, forklifts and the industrial machinery in oil, gas, energy, metal and mining industries in Arak, Markazi Province. The company is the largest heavy equipment manufacturer in the Middle East. It was established and registered in 1972, with the intention of assembly and production of heavy equipment.
Noting that government support for HEPCO has spelled trouble for mining companies, he said, “More than 7,000 mines in the country are waiting for HEPCO to see if they can provide the required machinery or not. Some 70% of Iran’s mines are small-sized. HEPCO is not capable of meeting their demand for small machinery either, let alone heavy ones.”
Iran is home to 81 types of minerals with reserves totaling 37-40 billion tons, according to Alireza Shahidi, the head of Geological Survey and Mineral Exploration of Iran. 
“Construction materials, including gravel, rubble stones, sand and different types of stones, account for 62% of Iran’s mineral reserves, metal minerals constitute 10-15% of total reserves and the rest are non-metallic minerals,” he said.
According to the United States Geological Survey, Iran holds the world's largest zinc, ninth largest copper, 10th largest iron ore, fifth largest gypsum and barite, and 10th largest uranium reserves. 
Overall, Iran is home to more than 7% of global mineral reserves.

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