Due to its special geographical position, Iran is endowed with considerable capabilities in its mining sector, which has some 50 billion tons of mineral reserves with 67 kinds of minerals. The significance of the mining sector in Iran's economy is because it provides raw material to mining industries. It generates the highest value added in raw materials sector of the Iranian economy. The close relationship between mining sector and mining industries is rooted in the crucial importance mineral raw materials have for mining industries. The exports of mining raw materials is less important, however, as it involves selling unprocessed natural resources of the country.
In the last two decades, mining sector (extraction) has accounted for less than one percent of Iran’s GDP with the figure remaining almost constant during this period. In recent years, exports and imports of minerals have on average comprised five and less than one percent of our annual exports and imports of goods respectively. The low share of mining sector in Iran's foreign trade may indicate that first, we have effectively protected our natural resources and have kept low the share in exports of mineral sector, the output of which is totally supplied to domestic mineral industries; and second, we don't need much imports in order to meet the demands of our mineral industries. It must be noted, however, that the mining industries are in general weak and that the inefficiency of the mining sector has aggravated the situation.
During the last 5 years, of the average annual 30 billion dollars worth of exports of goods,  only 7 percent (about 2.1 billion dollars) belonged to mining sector with iron and steel having the lion's share. In the same period, the average annual imports of goods amounted to 57 billion Dollars, with the annual mining sector imports of 7 billion Dollars accounting for 12 percent of imports. This culminated in a 5 billion dollar trade deficit, a large portion of which corresponds to trade deficit in iron and steel products. Iron and steel industry’s trade deficit has been around 6 billion Dollars in the same period.
In spite of huge mineral reserves, mining industries do not play a key role in Iran’s exports or domestic production; though it must be noted that the industrial sector as a whole, has a small share in Iran’s GDP. According to the national accounts statistics, Iran’s GDP, oil and gas excluded, during 2008-2012 was 1.7 million billion Rials (1994 constant-prices), 19 percent of which belonged to industrial sector. According to the statistics on industrial establishments (with 10 or more workers) for 2013, around 20 percent of the 1.2 million billion Rial GDP (current prices) corresponds to mining industries. This indicates that mining industries account for less than 5 percent of the GDP.
The above data underlines the insignificant role of mining industries in Iranian economy. The mining industries and those fields of activity, such as mining, which fulfill the demands of mining industries, need to enhance both their volume of production and competitiveness. Competitiveness in mining means increased production offered to mining industries at lower prices, competitiveness of mining industries means lower trade deficits and increased production together with penetration into foreign markets. Based on economic theories, higher production needs higher production scales and therefore economies of scale, which can be achieved by entering international markets.
The Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) owns a number of mines and mining industries and is supervising the extraction in mines and utilization of mining industries. It also offers advice on issues related to the development and improvement of exploration of mines, as well as operation of mining industries. The organization should seek to improve productivity and competitiveness of its mines and mining industries under. The solutions adopted by IMIDRO through research, can be applied for other mines and mining industries too. The purpose of this study is to help enhance mining sector’s productivity while overcoming challenges lying ahead. To this end, through empirical and statistical investigations, factors effective on productivity and competitiveness of enterprises active in mining and mining industries are identified, and relying on the experiences of other countries in this area, some policy advices are proposed.

Objectives

• Identifying factors effective on productivity and competitiveness in mining sector;
• Studying major drivers of competitiveness at micro level in mining sector enterprises;
• Studying major drivers of competitiveness at macro level in mining sector;
• Assessing privatization process of mining sector enterprises;
• Investigating government and development organizations role in fostering productivity and competitiveness in mining sector activities;
• Exploring the government’s role in fostering productivity and competitiveness in mining sector activities;
• Exploring IMIDRO’s role in fostering productivity and competitiveness in mining sector activities.

Beneficiary Organizations

• Ministry of Industry, Mine and Trade;
• IMIDRO;
• Ministry of Finance and Economic Affairs;
• The Islamic Consultative Assembly;
• The Office of the Vice President for Strategic Planning and Supervision; and
• Iran Industry, Mine and Trade House.