Economy, Business And Markets

Mining Firms Demand Royalty Concession

Mining Firms Demand Royalty ConcessionMining Firms Demand Royalty Concession

Deputy chairman of Iran Mine House, Mohammad Reza Bahraman, has called for the implementation of provisions related to concessions on mining royalties in the Mining Act.

“The Mining Act offers 20% royalty concession to mining companies that improve efficiency in mining activities, research and development, mining explorations and environmental protection,” IRNA quoted Bahraman as saying.

Mining royalties became the subject of a heated debate among industrialists after the parliament passed a law last year, which required mines to pay up to 25% of the value of their extractions as mining usufruct fees.

According to deputy minister of industries, mining and trade, Jafar Sarqini, about 18 trillion rials ($550 million at market exchange rate) were to be collected by the ministry as mining royalty in the current Iranian year (started March 21). But the amount was reduced to 3 trillion rials ($90 million) following negotiations between the Parliament and Cabinet officials.

Last year was especially tough for the mining sector as the prices of iron ore, copper and chromite experienced sharp declines. Annual mineral extraction fell by 5% to 400 million tons during the year from 420 million tons a year earlier. Officials have set a target for mineral extraction of 450 million tons in the current Iranian year.