The Effect of Legislation on the Development of Coal Mining Industry

Proven and probable coal reserves in Iran are estimated to be in excess of 5 Billion tons while the annual coal production is a mere 2 Million tons. Underdevelopment of the industry has proved higher production levels to be impossible, despite growing demand for energy supplies. The existences of numerous legislation are thought to have a detrimental effect on coal mining activities to the extent that some business entities have become uneconomical in many areas. This paper provides an analysis of the prevailing mining laws, policy making, legal frameworks and obstacles. It also outlines some other obstacles enshrined in the law and also highlights areas where foreign direct investment should be encouraged. The costs of lost opportunities are then estimated. The paper concludes by demonstrating that deregulations, amendments and in some cases complete abolishment of the incumbent legislations governing the coal mining industry will greatly enhance development of the industry. The analysis provided in this paper together with the results obtained, can prove useful to macro-economic policy makers both at local and national levels