Domestic Economy

Rewriting Mining Laws to Woo Foreign Investment

Rewriting Mining Laws to Woo Foreign Investment
Rewriting Mining Laws to Woo Foreign Investment

While the nuclear deal reached between Iran and the world powers has given fresh momentum to prospects of foreign investment in Iran’s lucrative economic sectors, several challenges remain before these investments can be secured.

Iran reached a landmark agreement with the P5+1 (the five permanent members of the UN Security Council plus Germany) in Vienna on July 14, which limits Iran’s nuclear energy program in exchange for lifting of sanctions imposed by the EU, the US and the UNSC that have hampered the Iranian economy for years.

Even though it will be months before the sanctions are finally lifted, a handful of investors have already started sizing up opportunities in various sectors.

Meanwhile, authorities are taking measures to remove the barriers to foreign investment. Iran currently ranks 130th on the World Bank’s table of easiest countries for business. Its absence from the International Centre for Settlement of Investment Disputes – a World Bank-run commercial arbitration service – is curbing investors enthusiasm while revisions to an old mining law are bogged down in Parliament.

> Legal Barriers to Investment

Lack of transparent regulations and layers of bureaucracy is one of the biggest challenges for foreign investment. Deputy head of Iran Mine House, Mohammadreza Bahraman believes that clearing the ambiguities in the mining law could play an effective role in attracting foreign investors to the mining sector, the Financial Tribune's sister newspaper Donay-e Eghtesad reported.

Iran’s mining law was first drafted in 1988 and has been revised three times ever since. But mining sector specialists believe the law needs to be updated to accommodate provisions for removing risks of foreign investment. The committee in charge of revising the law was formed last year in the Ministry of Industries, Mining and Trade headed by Bahraman.

“The committee has written amendments to the law and submitted them to the Parliament for approval,” said Bahraman.

In addition to seeking to remove ambiguities in the mining law to reduce the risks of foreign investment, the ministry is also scheduled to hold a conference in Zurich in September to introduce investment opportunities in Iran’s mining sector.

> Small Industries Eye Foreign Investment

The small industries sector, having long struggled with shortage of liquidity, is another sector hoping to benefit from foreign investment.

Deputy director of Iran Small Industries and Industrial Parks Organization, Gholamreza Soleimani says the organization is seeking to establish new industrial parks in collaboration with foreign industries.

“The ISIPO has prepared a list of industrial parks and industrial projects suitable for attracting international investment and submitted the list to the Organization for Investment, Economic and Technical Assistance of Iran which is responsible for receiving and processing all foreign investment applications,” Soleimani said.

“The organization has also listed 350 industrial projects for foreign investors  in a wide range of industries including electronics, chemicals, food and pharmaceutical, metal, non-metal minerals, leather and textile,” he added.

According to the official, more than 130 industrial units have already entered contracts worth $783 million with foreign investors, of which 35 projects are under construction and 97 have received operation license.