ECONOMIOC ANALYSIS OF THE COPPER MINING INDUSDRY OF IRAN.docVIP

ECONOMIOC ANALYSIS OF THE COPPER MINING INDUSDRY OF IRAN Kazem Oraee, PhD Professor, Stirling University, Stirling, UK, E-mail: sko1@stir.ac.uk Arash Goodarzi, MSc Research Fellow, Ministry of Labor and Social Affairs, Tehran, Iran, E-mail: arash_good@ Nikzad Oraee-Mirzamani, LL.B., M.Sc., D.I.C. Research Student, Imperial College London, London, UK, Email: N.Oraee10@imperial.ac.uk Abstract Mining of copper ore and the related industries play an important role in Iran’s economy. Copper ore production in Iran accounts for 75% of the total production in the Middle East. All activities related to copper, that is, exploration, production, refinement etc are owned and managed by state owned companies. Decisions have been made to privatize all these activities. To assess the success of this privatization process, different components of the industry must be subject to economic analysis. In this paper, the cost estimation of all operations has been carried out. The total potential and attainable revenues have also been estimated using historical data available from the industry. Risk is a major factor in all mining activities and the copper industry of Iran has been subject to risk factors arising from many internal and external variables. These variables have been recognized and their effects evaluated. The effect of risk on the economic feasibility of the operations in the industry has also been analyzed. Keywords: copper; economic analysis; Iran Introduction Iran is a developing country with a transitional economy, bases on to export raw materials. It is widely accepted that the existing public enterprises and large state-owned market players are no longer the most efficient way of running the economy and that a wide-ranging reform is necessary across Iran’s economy. Most of the developing countries have begun privatization in their public enterprises. Iran has also engaged in a large privatization program since 2005 and so far has privatized several state economic e