Iron ore protests against export duties, whispers of imposing duties on mineral exports were raised by officials of the Ministry of Industry, Mines and Trade several months ago. According to them, duties should be imposed on the export of these materials so that there are more restrictions on their export and most of these products are sold domestically.
In fact, launching new units consuming minerals and encouraging processing and creating more added value in the country are among the reasons that the government has cited for its proposal to determine duties on exports; But in the meantime, the private sector believes that all the minerals they produce are not absorbed domestically and supply exceeds demand, and until there is a balance, there is no reason to impose a ban, restriction or export duties on the export of these products.
In this regard, Engineer Qadir Giafeh, President of the Iranian Iron Ore Association and Vice President of the Iran-Russia Joint Chamber, said in an interview with Exim News: Planning was provided.
He continued: “Of course, according to the provisions of the text of the Law on the Elimination of Barriers to Production and the executive regulations of Article 37, the legal provisions approved in the executive regulations must be observed first.” These include the formation of an Article 3 Committee to determine tariffs or incentives for export goods; Then, after going through the legal process, the Economic Council finally votes on the imposition of tolls, which has not been the case so far.
Regarding the impact of tariffs on iron ore exports, the head of the Iranian Iron Ore Association added: “As a rule, the imposition of export duties according to the forecasts in the field of iron ore and also the forecasts of reputable international institutions, shows that it has put additional pressure on producers.” And will have a direct impact on the withdrawal of a number of other miners from the production cycle.
According to the Vice President of the Iran-Russia Joint Chamber, as a result, we should see more closures of small and medium-sized mines; Since large mines are mostly state-owned or quasi-state-owned or bank-owned, they are in a better position than small and medium-sized mines. Mining design, investment in the field of processing, etc., according to the income they have earned from development, has competently invested and developed downstream mining industries, which fortunately was accompanied by great success and today is witnessing production. Concentrate and pellets are inside, some of which are exported and some of which are used in the production of sponge iron and steel.
He added: “Now, considering the difficult conditions that iron ore miners are in, the imposition of export duties on iron ore in a situation where the needs of domestic steel mills are met and there is a surplus of supply, is not logical and with the provisions The policies of the resistance economy are inconsistent.
He continued: “By implementing this policy in practice, out of 199 registered and active mines in the country, a number of other small number of iron ore mines, the number of which will not reach 20, will be closed, and the motivation of iron ore miners to The hardness of keeping the mine active will be completely eliminated and a big blow will be dealt to the body of the country’s mine.
The head of the Iranian Iron Ore Association added: “On the other hand, following the decrease in world iron ore prices, production and extraction of this product also faced a significant decline, and many small-scale iron ore mines in the country, which were mainly privately owned due to this decline Prices lost their economic justification and were shut down, and because part of the country’s iron ore was exported due to a lack of effective domestic demand, the country’s iron ore exports fell sharply.
He continued: “By implementing this policy in practice, out of 199 registered and active mines in the country, a number of other small number of iron ore mines, the number of which will not reach 20, will be closed, and the motivation of iron ore miners to The hardness of keeping the mine active will be completely eliminated and a big blow will be dealt to the body of the country’s mine.
The head of the Iranian Iron Ore Association added: “On the other hand, following the decrease in world iron ore prices, production and extraction of this product also faced a significant decline, and many small-scale iron ore mines in the country, which were mainly privately owned due to this decline Prices lost their economic justification and were shut down, and because part of the country’s iron ore was exported due to a lack of effective domestic demand, the country’s iron ore exports fell sharply.
He added: “We hoped that with the increase in prices in world markets, some of these mines would return to the production and export cycle, but it has not yet breathed new life, the subject of this proposal was raised.” In fact, I believe that imposing tariffs on mineral exports is contrary to the development of mining, and this proposal will not help to return the closed mines to the production cycle.
Giafeh added: “With these interpretations, the Iron Ore Association has repeatedly expressed its opposition to the imposition of export duties.” Basically, when the country is in a period of prosperity, the government can demand tariffs from private sector activists and business owners, not when the country’s economy is in a deep recession and all units are facing problems with liquidity, funding and financing. They are struggling and are in a tight spot. The head of the Iranian Iron Ore Association continued: “In other countries, it can be clearly seen that governments during the recession to reduce production taxes and even accept part of the insurance of employees of units.” They act productively. Unfortunately, there is a contradictory reaction in Iran; In times of prosperity, when government revenues from the export of oil and other products increase and the treasury is full of oil dollars, and those in charge of the economy are happy about this, there are no restrictions or double tariffs.
He added: “But during the recession, when the government budget decreases due to the conditions of global oil markets and other export products, it creates obstacles in the way of the private sector, and in particular the business environment.”
Noting that only three countries have pursued a policy of tolls on mines and gained a bitter experience, Giafeh added: The three countries of Argentina, India and Indonesia have followed the above policy and implemented it in their own country. They realized that the result was nothing but failure.
The head of the Iranian Iron Ore Association stated: In India, which a few years ago imposed 30% export duties on its iron ore products to prevent illegal mining, the result of this policy is the backwardness of its comprehensive and strategic plan in the field of steel. And eventually became an import-oriented country in the field of iron ore.
He continued: “Today, India, after several years of implementing this policy, has not been able to supply the iron ore needed by its country and has inevitably turned to imports. In other words, the policy of imposing duties on iron ore has dealt a severe blow to the country’s iron ore industry.” کرد. Subsequently, the same result came for Indonesia and Argentina.
Giafeh added: “In fact, this failure indicates that in any country, governments enter the policy in this way and consider the ban and restriction of tolls as a prescription for the treatment of the economy or a particular sector, usually has the opposite effect.”
Regarding the toll policy, the head of the Iranian Iron Ore Association suggested: “I believe that the government should not pursue the implementation of the above policy and also provide a platform for the development of private sector mines, including small and medium mines.”
He said: “Tariffs should be imposed in a situation where we do not have a surplus of supply and disrupt the steel chain, while the current production capacity of iron ore in the country is 60 million tons and actual production is 39 million tons, of which 12 million Tons are exported, which is mostly done by large iron ore companies. Therefore, the country is currently facing a surplus in the supply of this product.
Emphasizing that the proposal to impose tariffs on iron ore exports requires going through various stages, he said: “The imposition of tariffs is at the full discretion of the government and must go through a process to be approved, which has not been achieved so far, and we hope to The offer remains and is not operational. Because the private sector believes that the policy will not be right and on the other hand its consequences are not in the interest of the country.
The head of the Iranian Iron Ore Association, referring to Article 37 of the Executive Regulations of the Law on the Elimination of Barriers to Production, said: “The imposition of any duties requires an effective domestic demand.” At present, production costs in Iran’s iron ore mines are lower than the world’s largest producers, and Iran’s iron ore exports are ranked tenth or eleventh in the world, and it can be claimed that it has a share of this market. For example, in 1992 we exported about 24 million tons of iron ore. On the other hand, we are the fifth or sixth largest exporter of iron ore to China. Therefore, Iran has a place in iron ore exports, but it is not decisive. At the same time, there is a concern that, given the decline in world prices and such policies, we may lose export markets forever, despite our existing capacity.
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