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September 2018, No. 88


Mining Investment Insurance Fund

What kind of activities the Mining Investment Insurance Fund deals with?

Farid Dehghani,
Managing Director of
Mining Investment Insurance Fund (MIIF)

Managing director of the Mining Investment Insurance Fund (MIIF), pointing to the scope of activities of the fund said: “The fund is 100% state-owned and is considered a supportive fund of the government. It is a specialized fund with 100% government investment which belongs to IMIDRO (Iranian Mines and Mining Industries Development and Renovation Organization).

 “The function of this fund is essentially covering the investment risk in the mines and mining industries in the various cycles of the value chain of the mining sector, and the exploration sector, which has the highest risk of investment, is in need of this risk coverage, of course most of the sectors are also under the same coverage.”

Farid Dehqani, stating that our main function is to cover the exploration risk, noted: “If the private sector investor is in need of providing financing, the investment fund for mining activities along with the risk of exploration will also support the investors in the finance sector due to the issuance of the exploration insurance.

“In other words, if the insurer intends to invest in exploration alone, he will receive an exploratory insurance from us, and if he reaches no conclusion in that investment and does not reach the desired deposit, 80% of his investment will be paid by the MIIF.” 

Acceptance of operation permit as guarantee by the MIIF during mining activities

The MIIF chief, saying that the banks do not accept the operation permit of the mines as guarantee, noted: “Despite legal measures taken to this end, the banks would not accept the mine and its operation permit as guarantee; but the fund accepts the permit as a documented pledge and on that basis issues a credit insurance payable to the agent bank.”

Referring to the backup services of the MIIF, he said: “The fund will consider the technical, economic, and financial justifications of the individual and will take into account all the mining machinery needed for extraction. Also, in the processing section in order to prevent crude sales and create more value added, it will provide significant support and good financial resources for the investors in the technology sector in order to enable them to expand that sector.”

Dehqani further added: “For example, in the concentrating section, if an investor takes measures to create a processing unit, we will support that section, the same as we support the extraction section, by providing him with easy access to financial resources. In addition, if the mine of a mine owner or a processor is in a specific condition, the fund will provide him with loans at 4% to 8% through the subsidies fund. These subsidies will help increase competitiveness among different sections.” 

Achievements of the MIIF, particularly over the past year

Referring to the performance of the MIIF from the beginning up to now, Dehqani said: “To date, we have created about 6,500 billion rials credit line to receive facilities and the money goes to the exploration, extraction and processing. Our strategy is mainly focused on supporting mines that enjoy the advantage of competitiveness in terms of production, reserve potentials and availability of the sellers market.”

He continued: “We have also signed a memorandum of understanding with various banks.” 

What is your program for attraction of investors in the New Year?

Referring to the programs of the fund for the attraction of the investors, Dehqani said: “Thanks to the efforts of our friends and colleagues in this direction, low-cost financial resources have been attracted and mine owners after completing administrative formalities will gain access to those resources.”

He added: “In connection with the remaining cases, due to the increase in the capital we collect from our stockholders, we have increased the amount of loans and credits to the customers and hope that if exploration resources out of the funds provided by the Ministry of Industry, Mine and Trade are also available for the New Year, we can have a good leap, and if there are no resources, we should use other resources of IMIDRO.”

Stressing that all such efforts are directed towards increasing investment in the mining sector, he said: “The more we could reduce investment risk in the mining sector, the more we can increase profitability, and the easier we can make access of the mine owners to the financial resources, the more successful we will become.” 

Mining Investment Insurance Fund (MIIF)

Address: No. 22, Goldan St., Near Modarres Highway, Africa Blvd., Tehran - Iran

Tel.: (+98) 021 23591201

Fax: (+98) 021 22053619

Web: www.iranmico.ir

 

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  September 2018
No. 88