Will gold exports help boost Iran’s economy?

Al Monitor| Maysam Bizaer— Millennia after the discovery of gold, the metal continues to retain its value and status as precious and remains widely used. Its unique characteristics, including its malleability and resistance to corrosion, have made into a key element in medicine as well as in engineering and electronics. The significant economic advantages of the metal, such as its profitable trade along with related wealth and job creation, are the most important factors behind countries around the world attaching paramount importance to their gold industries. Iran, one of the most resource-rich countries, has not been an exception. Investment in gold-mining projects and related industries have surged in the past decade. In recent years many important developments — among them the discovery of gold reserves in Yazd province and the establishment of major gold complexes — have further shone a spotlight on Iran’s gold reserves and their potential.

With Iran holding proven gold reserves estimated at 340 metric tons — scattered among some two dozen mines, 15 of which are currently operational — the Money and Credit Council of the Central Bank of Iran (CBI) issued a letter to custom’s authorities legalizing the export of raw gold, provided it is extracted from domestic mines and is not sold on Iranian markets at competitive international prices. Moreover, exporters must repatriate revenues either as foreign exchange or standard gold bars. The letter also stated that the change in policy was pending approval by the Industry, Mines and Trade Ministry.

Previously, the CBI had held the exclusive right to export gold. Although exporters still need permission from the CBI to sell gold, the removal of previous limitations has been hailed by many active in the country’s gold industry. “The move gives the opportunity to Iranian mines to enter the competitive market of gold exports. Iran can also enter global markets,” Mohammad Vali, head of Iran’s Gold and Jewelry Producers and Exporters Union, told the semi-official Iranian Students’ News Agency July 5.

Kourosh Azizi, an economics consultant who works with mining companies, also described the lifting of restrictions as a positive development, provided relevant and well-designed schemes will also be put forward. “Key gold reserves in Iran are managed by the government, while the private sector runs small mines,” Azizi explained to Al-Monitor. “In the short term, the legalization of raw gold exports helps the private sector access foreign exchange resources, which subsequently helps it attract capital, pay off debts to banks and resolve other problems it faces. With the private sector booming, small economic enterprises will be able to attract investment as well, something considered as a driving force to make and maintain changes in gold mining.”

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