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Legal Dispute Heats Up Over 2 Major Mines

Legal Dispute Heats Up Over 2 Major MinesLegal Dispute Heats Up Over 2 Major Mines

As many as 4,000 shareholders of iron ore mines have signed a petition to the president’s office, asking President Hassan Rouhani to personally intervene the controversial mine royalties issue, IRNA reported.

The protesters urged the president to issue a decree for the royalties’ case to be investigated by taking the private sector’s rights into account. They also pleaded the president to help the primary shareholders of Chadormalu and Golgohar iron ore mines get back their exploitation licenses, which they say were illegally taken over by the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) in 2007.

The government transferred the two major iron ore mines to the private sector in 1991 to compensate the lack of equity and also to develop the production of steel. The process saw more than 40% of Chadormalu shares transferred to a private company affiliated to Bank Sepah, said Alireza Asgari Marani, a high profile expert at the equity market.  

Marani added that the two iron ore mines’ remaining shares were mainly transferred to a company owned by the retired staff of the National Iranian Steel Company. The launch of three iron ore concentrate production lines in Chadormalu in the central Yazd province helped the country produce 10 million metric tons of crude steel.

A few years later, the Banks’ Pension Fund and the National Justice Shares were also added to the shareholders and therefore millions of people joined the large group of the shareholders for the two mines. Since the new group of shareholders formed, the government started to take back the possession of the mines especially after tensions grew over the two mines’ royalties.

According to Marani, the government announced that the two mines were among the country’s major mines, an excuse that helped the government to retain the ownership. The government then transferred back the ownership to IMIDRO. This is while the Mining Act explicitly stipulates that when the government expropriates a mine, it must evaluate the mine’s price and the costs invested and then pay them to the primary owners.

The equity market expert added that the government not only refrained from paying the mines’ prices to the private sector shareholders, but also ignored the investments made for tailings section. Now, the only glimmer of hope for the shareholders is the verdict given by the  Administrative Court of Justice which says the two mines must be once more taken over by the private sector.

The dispute for the two mines’ royalties ignited a bigger conflict which has involved other mines as well.

Financialtribune.com