Economy, Business And Markets

Gov’t Urged to Revive Mines & Metals Ministry

Gov’t Urged to Revive Mines & Metals MinistryGov’t Urged to Revive Mines & Metals Ministry

The Stone Association of Iran has urged the government to revive the ministry of mines and metals, which had been created back in 2000 based on downsizing policies after a series of splits and merges, reported IRNA on Saturday.

Abolqasem Shafei said the merger of the ministries resulted in governments neglecting the national mining industry. The Rouhani administration should deal with this as an urgent matter and reestablish the ministry of mines and metals, SAI president said.  

According to him, the mining companies are now facing numerous problems in different provinces, including conflict with the Department of Environment. He added that mines incur costs imposed by different organizations, something that leads to higher extraction costs for them. The mining sector has suggested the formation of a special workgroup consisting of mine owners, extraction and supervision department, and experts from the government and the private sector. The group of experts would aim to identify the areas of disagreement with the environmental officials.

Another big challenge facing the mine operators is that extraction companies are also charged with VAT, while the value added tax is legally imposed on processing and manufacturing units and the extractors who sell the raw minerals do not have to pay taxes. Another issue of concern for the mining companies is that they have to buy between 30% and 40% of the fuel for their mines at the free market rate.    

The mining companies also complain they are not well protected by the ministry of industry, mine, and trade as the government has increased the royalties without consulting with the unions and associations.

Experts say as the economy grapples with stagnation - a trend which is expected to continue through next year - a new policy needs to be devised to prioritize the export of stones.

Decorative stones market experts say 15.5 million metric tons of stone was extracted in the Iranian calendar year 1391 (ended March 20, 2013) worth 5.2 trillion rials ($153.8 million based on market rate). Throughout the year 1392 (ended March 20, 2014), stone extraction slumped to 15.2 million metric tons valued at 5.54 trillion rials ($163.9 million). The government royalty was 1.71 trillion rials, and 8 trillion rials, respectively, in these two years.