Necessity of Mining Policies to Meet Market Needs
Given the country's economic conditions, a 90% increase in state mining rights in next year's budget will definitely affect the cost of the mines and make it difficult for miners.
According to the International Stone Exhibition of Iran, a country's budget reflects the state's position in the economy and determines the extent of government involvement in this area. Since oil revenues in the next year's budget have been significantly reduced, the government has become more concerned with tax revenues. Government rights and proprietary interest in the mines have skyrocketed, but given the country's economic conditions, a 90 percent increase in state mines in next year's budget will definitely affect mining costs and make miners difficult.
Closing of some mines
"This is not a problem for government mines but a problem for investors and the private sector," said Keyvan Jafari Tehrani, an international expert on the Iranian iron ore market, who said that the increase in government rights and equity interest projected in next year's budget did not pose a problem.
Jafari Tehrani stated that the private sector should be supported, saying: We should not make the investor, especially the private sector investor, afraid of getting out of the investment arena. If property interest and government rights are to be increased and the investor is unable to offset this increase elsewhere, it will have the opposite effect, closing some of the country's mines.
The international expert on the iron ore market in Iran also said that the increase in the price of mineral products would naturally increase when the government's rights and ownership interest increased. Because primary mining products are considered upstream, the rate of intermediate and downstream products increases in the same proportion as the finished rate in the mine increases.
"We can strike a balance if we adjust the domestic sales rate," he said, referring to the increase in export duties on upstream minerals.
Jafari Tehrani also commented on the impact of rising rates on domestic production and exports of steel products: The increase in the cost of finished iron ore, concentrate and pellets will affect domestic and export rates, and this will also reduce our share of the steel export market; Decisions to increase equity and government rights must be based on a policy that is consistent with market needs.
He stressed: "If this is to happen unilaterally and on the government's side, we will have the opposite result and we will see the closure of mines and reduced production in the country."
The mining sector needs revenue
Mansour Ghorbani, a professor of mining at Shahid Beheshti University, said: "Increasing government salaries is of no benefit to the government and the private sector, as a result of which many small mines suffer losses and are eventually shut down."
Expressing that the mining sector is in need of income, the victim said, "Miners must have an income so that the government can receive property and state rights." Where can the state pay when the mine is closed and the mine closed? So not only will the government and the miner benefit, but they will both lose, and as a result, the mine will be orphaned.
Pointing out that government rights and taxation of government revenues are from the mine, the university professor said: "Taxation cannot be enforced because it has many consequences. If we increase it to a single class but do not pay attention to their income, we will only push them to a holiday. Remember, when a company loses, it can no longer afford to pay taxes.
Emphasizing that the mining sector needs a lot of funding, Ghorbani said: "If the government wants to thrive in business and employment, it should activate the mining sector by raising funds." Exploration, extraction, production and processing require considerable cost, so the government must support the miner to ultimately make money.
The government, with the support of the miner, solves some of the social problems through employment. Employment needs to be expanded and the private sector thrives, boosting economic growth, so injecting budgets and facilitating mining policies and diminishing the role of government in economic activity can help the mining sector grow.
* Mining days
