By Mahnaz Abdi

Mining sector facing shortage of machinery

March 7, 2022 - 15:3

TEHRAN- Three factors including the sanctions, rising forex rate, and improper management and policy in the production chain, maintenance, import and distribution of heavy machinery have caused serious damages to the mining production chain which if continue may lead to irrecoverable losses in this major part of national economy.

While emphasizing the necessity of importing mining machinery, the chairman of the Mines and Mining Industries Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) has said last week that the mines of country need 10,000 pieces of machinery, while domestic production is just 500 pieces per annum.

Emphasizing the close relationship between mining machinery and the amount of mineral production, the cost of production and also whether mines remain active or inactive, Ebrahim Jamili said, "What everyone agrees on today is that, firstly, our mining machinery fleet is worn out, and secondly, the existing machinery is very, very expensive, and thirdly, due to not meeting the need for mining machinery in the past years, these problems have accumulated and have reached an alarming stage.”

These three factors necessitate an urgent and decisive decision to supply mining machinery, he stressed.

"Under the pretext of supporting domestic production, the supply of mining machinery has become a major challenge in the mining industry," he said, adding, "There is no doubt that domestic producers must be active and produce the required products, but domestic production capacity in terms of type, quality and number of their products, especially in the field of mining machinery does not meet the existing needs.

“At present, due to the shortage of these machines, purchase prices have skyrocketed and, in addition, their rents have become very expensive. At these prices, it is not profitable for small and medium-sized mines to rent machinery and become active. Finally, the miner has the mine and the raw material, but it is not economical due to the expensive operation of the machinery”, the ICCIMA member further lamented.

Mentioning the small mines, it should be noted that Industry, Mining and Trade Ministry is seriously following a program for reviving, activation, and development of idle small mines.

The plan for reviving small mines in Iran was first launched by Iran Mine House in early 2018 in the framework of some agreements with the mining associations and companies.

Then the plan was officially put into operation in April 2020, and Industry, Mining, and Trade Ministry is pursuing it seriously.

As stated by the vice chairman of Iran Mine House, the ban on the import of mining machinery and the staggering costs of supplying them have caused small and medium-sized mines to close and large mines to operate at 50 percent of their capacity.

“This is a disaster for the mining industry”, Hamid-Reza Amirian lamented.

It is while minerals such as iron and copper are used in the country either as raw materials for domestic production and create jobs, or are exported and bring foreign currency, he noted.

Pointing out that the excuse for banning import of these machines is to support domestic production, he explained, “Unfortunately, no one pays attention to the fact that many of these machines are not domestically manufactured at all.

Mining machines are super heavy machines and have limited manufacturers in the world. That is, there are no more than six or seven producers.”

“In the current situation, we cannot say that we want to produce alongside these producers, in addition, the country does not need so many machines of this kind that we want to be the independent producer”, he added.

Finally, as stated by the head of ICCIMA’s Mines and Mining Industries Committee, “Various estimates show that more than 10,000 units are needed in the country's mines next year. This is while the domestic production capacity is less than 500 units. Therefore, it is necessary to supply these machines through imports in order to break their price bubble in the market. Because the price bubble of mining machinery is only for the benefit of brokers; neither the miner nor the machine manufacturers make a profit.”

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