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Underground profits.

Iran's President Rafsanjani is rushing towards economic liberalisation in an effort to stimulate business activity. Income from oil exports is insufficient and industrial growth is sluggish. Magda Abu Fadil reports on the hopes for diversification currently placed on mineral resources.

President Ali Akbar Rafsanjani who won re-election for another four-year term in June is determined to see Iran enter the next century as a strong and self-sufficient industrial regional power. During his electoral campaign, Rafsanjani said his government placed particular emphasis on restructuring Iran's economy to cut its dependence on oil revenues. A presidential candidate running against Rafsanjani attacked the incumbent on his economic performance and called for stricter control of foreign business dealings.

Iran e Ferda ("Iran of Tomorrow"), an Iranian monthly close to Islamic liberals, has attacked the government's economic and monetary policies, calling for a complete overhaul and criticising the creation of free trade zones around the country. Nevertheless, the central bank governor announced in June that Iran plans to privatise its 20 banks which were nationalised after the 1979 Islamic revolution to encourage competition and draw more foreign investors.

A senior Iranian official told reporters recently that his country was encouraging foreign investors by offering mines to the private sector. Iran is threatened with an economic slowdown which could trigger social unrest because of spiralling inflation and a financial crisis, according to Iranian and Western experts. Unable to pay for massive imports over the past two years as its oil income stagnated, Iran faces some $8bn in back payments to its main trading partners, according to estimates from European bankers.

While various industries in the automobile, engineering and textile sectors have slowed down due to a shortage of spare parts, copper output at the Sarcheshmeh complex in Kerman exceeded 120,000 tons in the Iranian year which ended in March 1993, up by 5% compared with the preceding year.

The deputy mines and metals minister, Rahim Kolahduz, has said that the facilihty aims at a production target of 145,000 tons of copper by processing 450,000-500,000 tons of copper ore annually. Kolahduz also says that to capitalise on the Sungun copper mines in the eastern province of Ahar, the government has allocated $2.2m to acquire a copper concentration factory which would produce 150 tons of concentrated copper daily when it becomes operational by the end of March 1994. He claims that some 30,000 tons of copper from private sector companies and over 35,000 tons from the Sarcheshmeh complex have been exported up to March of this year.

In May, Rafsanjani visited the Kerman province's Shahid Bahonar copper complex which has three large-scale units for casting, rolling and extrusion of various classes of copper pipes and copper alloys. The facility's products are used in the electrical and electronics industries, refrigeration and thermal industries, military industries as well as the making of alloys for minting by Iran's central bank. The complex produces some 54,000 tons annually, according to government figures, but officials say the output can be raised to 72,000 tons a year.

To further his economic objectives, the president also visited the iron ore mine of Golgohar in the same province and told its personnel that up to 20m tons of the ore could be extracted to fit in with his national development plan. Golgohar currently produces about 2.75m tons of concentrated iron ore with a purity of 68% which can be exploited by the country's steel industry, and can be improved to 5m tons in another two years.

Minerals exports fetched Iran about $10m in the 1989-90 fiscal year, according to the latest official figures, with lead and zinc alone accounting for 76% of the total share.

Iran has also embarked on major trading and cooperation agreements with its Asian and Gulf neighbours in a bid to improve its regional standing. Iran has participated in several industrial fairs to show off its products and lure new partners for joint ventures. It recently signed a number of letters of understanding for industrial, mineral and economic cooperation with Ukraine, including one covering mine exploration and followed up with a similar accord with Turkmenistan. In addition, Tehran has offered to help provide industrial expertise to Moldova. Iran and South Korea are also considering joint ventures that cover mines and minerals and Tehran made its presence felt at a trade fair in Qatar in April by showcasing its steel industry.

The foreign minister, Ali Akbar Velayati, toured Arab Gulf states in the spring to repair the damage from a territorial dispute with the UAE and allegations that Tehran seeks to dominate the region.

On a more glittering front, Vice-President Hassan Habibi in May inaugurated Iran's first gold extraction mill in Mooteh in Isfahan province. The mines and metals minister, Mohammad Hussein Mahluji, says that to date some 63 gold mines have been identified in the country, but that due to lack of know-how they had not been exploited in the past. He estimates that construction, installation and required equipment for the Mooteh gold mine would cost over $18m.

According to Mahluji, the gold mine has nine tons of deposits. The adjacent mill's rated capacity is 500 kilogrammes from 200,000 tons of gold deposits annually. Gold reserves at two major sites will yield enough deposits for the Mooteh mill for at least another 16 years, reported the official IRNA news agency.
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Title Annotation:Iran's President Ali Akbar Rafsanjani's efforts at economic liberalisation
Author:Fadil, Magda Abu
Publication:The Middle East
Date:Sep 1, 1993
Previous Article:A useful distraction.
Next Article:Groundwork costs money.

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