1. Objective
This regulations has been drafted in regard of implementation of the clauses (6) and (7) of the Article 9 of IMIDRO Articles of Association and in order to invest in development and promoting of mine exploration, partnership in equipping, extraction, mineral processing and mines renovation, partnership in construction, development and renovation of mining industries, partnership in provision of infrastructures such as rail way, road, water, power and gas supply as well as partnership in other activities which facilitate IMIDRO’s objectives.
2- Scope of Application
This regulation will be applied within IMIDRO, as well as its affiliated companies and independent projects.
3. Definitions
In this regulation the Organization means the Iranian Mines and Mining Industries Development & Renovation Organization (IMIDRO), Executive Board means the Executive Board of IMIDRO and the Committee means the Investment Committee of IMIDRO.
4. Procedure Description
Chapter 1- General
Article 1- The Projects For Partnership & Investment
All types of the following projects fall under investment and partnership both in implementation and exploitation:
A. Mine exploration and review and study of assay of all kind of mine reserves in category (2) which are the subject of sub clause (b) of Article (3) of the Mine Act;
B. Extraction, ore dressing and mineral processing projects which are subject of sub clause (b) of Article (3) of Mine Act;
C. Mining and metallurgy construction and development projects;
D. Mining and exploitation machinery renovation projects;
E. Mine and mining industries production lines renovation and reconstruction projects;
F. Value added creation projects in mine and mining industries sector;
G. Infrastructure projects for mine and mining industries units;
H. Localization and transfer projects of high-tech and new technologies in mine and mining sector;
I. Other projects as discerned by the investment committee of IMIDRO;
Note 1: in the exploration projects, IMIDRO carry out preliminary measures such as delineation of the exploration area, obtaining approval for blocking the area in the name of IMIDRO from the ministry of industry, mine and trade, collection or preparation of the required basic data such as airborne geophysics, reconnaissance operation, nominating new exploration indices as well as classification of the indices resulted from exploration operation and definition of the exploration areas containing the indices. Then the exploration area is put on the tender and the value of the mining area will be paid to IMIDRO by the selected bidder, or alternatively is considered as IMIDRO’s equity in IMIDRO– bidder joint company. IMIDRO in compliance with the Article (44) of the Constitution and its implementing regulations will form a joint company with the investor (the selected bidder). Necessary measures for the formation of the joint company such as partnership contract and or article of association, holding the Founders Assembly (if required), selection and nomination of the members of the board of directors or mangers will be undertaken by the partners. After determination of the sharing structure of each party, the exploration license or the ministry approval will be issued and based on the services described on the back of the license, the joint company will mange exploration operation until exploitation of mine reserves and issuance of the exploration certificated, then, the company will take measures to equip and develop the mine. In this regard, IMIDRO share percentage will be negotiable. It is clear that required understandings in the joint company regarding work implementation will be made among the partners.
Article 2- Types of IMIDRO Equity
IMIDRO equity which will be used in partnership for implementation of the projects in mine and mining industries will be one the followings:
A. The value of the mining area;
B. Assignment of the concession of the exploration undertaken;
C. Assignment of exploration certificate and exploitation license;
D. Rendering technical, engineering as well as managerial services in exploration, exploitation, ore dressing and mineral processing of mine and metallurgical industries;
E. Supply of exploration and exploitation equipment;
F. Supply of production line machineries and equipment;
G. Provision of technical and technological know-how required by the project;
H. Partnership in investment for projects implementation;
I. Other items discerned by the investment committee of IMIDRO;
Article 3- Criteria for Acceptance of the Projects
The most important criteria for the projects acceptance for partnership in implementation are as follow:
a. Being in line with IMIDRO objectives and priorities;
b. The presented technical, economical & environmental feasibility study;
c. Creation of higher relative advantage and value added;
d. Transfer and attraction of superior technology and being environmentally compatible;
e. Being internally and externally marketable;
f. Job creation for the university graduates;
g. Suitable investment return rate ;
h. Development of economic activities in the deprived areas;
i. Creation mining infrastructures;
Article 4- Persons Eligible for Partnership
IMIDRO shall undertake partnership in the activities subject of the this Regulation with the following persons, in compliance with provisions stipulated in this
Regulations and the Articles of Association approved by the Executive Board:
a. Legal and real persons including initiators, inventors, innovators, entrepreneurs and generally geologists, mine engineers as well as metal and non-metal specialists;
b. Real and legal persons and cooperative requesting for activity in the projects subject of Article (1) of this Regulation;
c. Iranian legal persons whose production activity place is in Iran but part of the share belongs to the investors resided abroad;
d. Foreign legal and real persons approved by the OIETAI;
e. Other real and legal as indentified by IMIDRO investment committee;
The persons mentioned in the above clauses shall qualify at least one of the following conditions:
• Capability and competence
• Having background in partnership in mine and mining industries and/or shareholding and managing in the related areas.
• Suitable financial and economical situation of the partner (based on the attached table) and the equity as determined by the investment committee and approved by the Executive Board of IMIDRO.
Note 2: The foreign investors who obtain investment license from OIETAI can invest and participate in partnership, however, local investors shall take part in the partnership and investment in IMIDRO projects, only through bidding process.
Article 5- Conditions for Admission of Foreign Capital
Admission of foreign investment shall be made in accordance with the provisions of the Foreign Investment Promotion & Protection Act (FIPPA) and its implementing regulations enacted by the Islamic Consultative Assembly on 10/03/2002 and by the Expediency Forum on 25/5/2002 and with the observance of the prevailing laws and regulations for the purpose of development of the mine and mining activities based on the following criteria:
- Bring about economic growth, transfer of know-how, enhance mine exploration, upgrade exploitation technology and mineral processing;
- Enhance production technology and promote products quality and technical specifications in mining and metallurgical industries, so that to comply with the environment protection criteria and destruction of basic resources, specifically natural and water resources;
- Bring about relative advantage and enhance mineral product value added;
- Promote job creation opportunities and export boost;
- Provide financing required for the investment;
Article 6- Foreign Investor Equity
Types of foreign capital, cash or non-cash, which is imported into the Country by foreign investor include the followings:
a. Cash funds in the form of convertible currency through banking system or authorized money changing offices or through other ways;
b. Machineries and equipment;
c. Tools and spare parts, CKD parts and raw materials, additive & auxiliary materials;
d. Patent right, technical know-how, trade names and marks and specialized services;
e. Transferable dividend of the foreign investor;
f. Other permissible items approved by the Council of Ministers in accordance with FIPPA;
7- Authorities to Propose the Projects
The investment projects may be proposed by one or combination of the following authorities:
a. IMIDRO or its subsidiary companies;
b. The Ministry of Industry, Mine & Trade;
c. The Organization for Investment, Economic & Technical Assistance of Iran (OIETAI);
d. Real and Legal persons, private and cooperative;
e. Foreign or Iranian real and legal persons using foreign capital;
f. Explorers, initiators, inventors, innovators, entrepreneurs and generally geologists, mine engineers as well as metal and non-metal specialists;
f. Other investors;
Article 8- Method of Calculation and Assignment of IMIDRO Equities
IMIDRO equities in partnership will be calculated as following and considered as IMIDRO shares in the existing and established units:
a. The mining area will be initially valued by an official expert, then bids will be called and the highest bid amount ( the amount proposed by the selected bidder) will be considered as the value of the mining area;
b. Machineries and equipment will be valued on the price of the day;
c. Technical know-how, license right and ... will be calculated based on price of the day;
d. Cash investment will be proportionate to the partnership;
e. Land, building, landscaping and other expenses will be valued based on the expert price of the day;
f. The value of the items above shall be confirmed by the official experts of the Ministry of Justice;
Chapter 2- Work Process for Partnership
Article 9- Nomination of Partner
The applicant for partnership who is nominated by one of the authorities as referred to in Article (7), shall submit his proposal together with the required documents to the Finance, Economic and Investment Development Management of IMIDRO and fill in the related forms which have been prepared based on the specifications of the projects. (local investors who are willing to enter into partnership with IMIDRO for their independent projects shall also go through this process).
Article 10 – Preliminary Review
After preliminary review in accordance to the defined process, the proposed project will be examined by the specialized departments. At the same time, the competency and capability of the investor will be examined. Then in order to determine the facilities, technical, financial and managerial capabilities of the investor as well as objectives, implementation process and the effectiveness of the project and also the method of cooperation and clarify duties of each parties in the partnership after preparation of the preliminary reports, the proposal will be reviewed in accordance to the prevailing rules and regulations at the Investment Committee based on the submitted documentation. The following shall be paid attention in the process of review:
a. Estimation of the initial capital and exploitation expenses;
b. Determination of the capacities and products;
c. Economic analysis and method of financing;
d. Products marketing;
e. Estimation of the financial credit and the manner of payment each party’s share;
f. Environmental issues;
The committee, taking into account the above-mentioned factors and in compliance with the terms and conditions in partnership principles after acceptance or rejecting of the proposal, will send results to the Executive Board Secretariat within 15 days in order to the obtain the Executive Board approval.
Article 11- Project Final Review
The Committee approval will be put forward in the executive board meeting and will be reviewed based on the following items:
a. The Committee opinion;
b. The sharing structure if each partners;
c. The project location & executive schedule
d. Estimation of the required financial credit
e. License contracts and technical assistance
Article 12- Project Approval
The approval of the project in the Executive Board and notification of the same by the Chairman of the board shall be considered as the issuance of the investment license in the approved project and provision of the required credit for settlement of IMIDRO’s share from local or general or resources.
Chapter 3- Implementing Regulations for the Projects In Partnership With the Local Partners
Article – 13- Preparation of Partnership
After approval of the project in the Executive Board and communicate of the same to the related deputy, IMIDRO will take the next measures to go into partnership, taking into account the provision of the partnership agreement.
Chapter 4- Work Process for the Foreign Investors
Article 14- Attraction of Foreign investment
Foreign investor shall be nominated by IMIDRO subsidiary companies, inside or abroad the country, the Ministry of Industry, Mine and Trade and its subsidiary organizations as well as the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) and other relevant organizations or direct referral of the foreign investor.
Article 15- Methods of Foreign Investment
Admission of foreign investment may be carried out by one of the following methods and shall benefit from privileges of FIPPA.
A. Foreign direct investment in the fields in which private sector activity is permissible.
B. Foreign investment in all fields within contractual arrangements of “Civil Participation” , “Buy-back”, and “Build-Operate-Transfer (BOT)” schemes in which the return of the investment and related benefits only results from economic performance of the project, as well as other methods referred to in FIPPA and its implementing regulations as amended, and also other international schemes as approved by the Investment Committee.
Article 16- Investigation of Foreign Investment
Principle and preliminary investigations, detailed feasibility studies and detailed definition of the project shall be carried out by the specialized departments, and the resulting reports will be then set forth in the Investment Committee. Approved by the committee, the reports will be sent the Executive Board for approval.
Article 17- Principal and Initial Investigations
Foreign investment proposals for the intended activities within the framework of FIPPA, will be carried out through the following stages under supervision of a committee comprising of the Finance, Economic and Investment Development Department as well as the specialized departments of IMIDRO:
a. Carry out initial negotiation with the investors and reviewed the technical, financial and managerial capabilities and their backgrounds by IMIDRO and submit the evaluation report by the specialized departments in accordance with the work process and final submittal of the same to the Chairman of the Executive Board;
b. Receipt of the written application from the investor;
c. Taking viewpoint of the Chairman of the Executive Board;
d. Continue negotiations with the applicant in order to determine framework and methodology of work implementation as well as carry out pre-feasibility studies;
e. Drafting agreement on the work principles, feasibility study and breakdown of the duties;
f. Determine the capacities and products;
g. Market study report;
h. Agreement on the investment method and the manner of financing of the projects financial facilities;
i. Estimation of the required investment as well as economic analysis of the project;
j. Report to IMIDRO Investment Committee as well as the foreign investor for review and agreement to proceed with the work (the First Approval);
Article 18- Detailed Feasibility Studies
After receipt of the Executive Board’s agreement to continue the work, a Letter of Understanding shall be drafted for preparation of the feasibility study and start up of the work stages, by a committee comprising of the Finance, Economic and Investment Development Director, as well as the specialized departments, with respect to the followings:
a. The names of the partners and the proportion of their shares;
b. Location of the project;
c. Description of scope of services of the feasibility study;
d. Determine the duties of each partner in this study;
e. Estimation of the required financial credit to carry out detailed feasibility study, the manner of payment and the share of each partner;
f. Determine raw material, additives and auxiliary material regarding mining and metallurgy industries;
g. Principal products & capacities of the project regarding exploration, extraction, ore dressing and mineral processing;
h. Selection of a project manager and members of the strategic committee (if necessary);
i. Submit progress reports to the strategic committee;
j. Agreement of raw material supply contracts, marketing, license and technical assistance, land, infrastructure facilities, work force, management, insurance and method of work implementation;
k. Required agreements with financial resources;
l. Project implementation schedule;
m. Agree on the principles of the partnership agreement;
n. Fill in the forms attached to the FIPPA;
o. Preparation of investigation final reports;
p. Submit the report to the Executive Board as well as to the foreign investor to take their viewpoints and approval or agree to continue the work into the next step (the Second Approval);
Article 19- Project Detailed Definition
After obtaining the Second Approval, those parts of the basic and detailed engineering works which is required for investment and project implementation shall be carried out by the following order:
a. Preparation of a bankable technical, economical and environmental feasibility study (detailed feasibility study);
b. Submit the feasibility report to the Executive Board and the foreign investor(s) to take their viewpoints and obtain their final approval;
c. Sending the completed forms and questionnaire of FIPPA to the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI);
Article 20- Final Decision Making on the Joint Investment
The Executive Board and the investor(s) shall, taking into account the report referred to in the Article 19 as well as their legal and organizational authorities and based on the approval received from OIETAI, decide on the implementation or non- implementation of the project. (Final Approval);
Chapter 5- Execution of Partnership with Foreign Investors
Article 21- preliminary Measures
After final approval of the project by the Executive Board and the partners, the following measures shall be taken:
a. Signing of the partnership contract or Articles of Association;
b. Holding Founders Assembly (if required);
c. Selection and nomination of the board of directors’ members and or partners’ directors (if required);
d. Sending application to the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) for FIPPA coverage;
e. Signing of all original and subordinate contracts;
f. Provision of IMIDRO’s equity share;
Chapter 6- IMIDRO and Common Projects Regulations (in case of IMIDRO share in partnership)
Article 22- Project Manager
The project manager will be the coordinator and executor of individual stages of the partnership process up to the stage of the company registration and shall be proposed by the related Deputy and appointed by the Chairman of the Executive Board. The project manger shall report to the related Deputy.
Article 23- Combination of the Executive Board of the Project (in case of IMIDRO share in partnership)
The project executive board shall comprise of several experts having technical, financial, economical, legal, commercial as well as planning expert knowledge. The member of the projects executive board will be nominated by the Chairman, based on sharing percentage of IMIDRO in partnership, and shall cooperate up to stage of company registration. In case of the company formation, and if deemed appropriate by IMIDRO, members of the project executive board will be appointed as the members of the board of directors. Since in most cases full time working for the members of the executive boards for each of the projects shall not be necessary, the members of the executive boards shall work in parallel with individual projects.
Article 24- Strategic Committee
The strategic committee will carry out the duty of coordination between the partners to create required facilitation in order to reach the project’ objectives during different stages of the project implementation within the framework of the schedule agreed by the investor’ partners. The strategic committee will be comprised of the partners’ senior managers as well as the project managers selected by the two parties. The numbers and combination of the members will be determined, separately as required.
Article 25- Budget
Provision of the expenses for different stages of partnership process of IMIDRO’s share which shall be forecasted in IMIDRO annual budget shall be borne by the Deputy of Financial & Administrative. The account of each project’s expenses book shall be kept separately.
Article 26- Time Schedule
The time schedule of the project implementation shall be drawn up separately, based on the type of the project, the amount of investment as well as the rules and regulations governing over the partners.
Chapter 7- Others
Article 27- FIPPA
All partnership contracts signed with the foreign investors and/or Iranian investors with foreign capital shall fall under FIPPA enacted by the Islamic Consultative Assembly on 10/03/2002 and by the Expediency Council on 25/5/2002 as well as this regulation and is considered as the main approval for the conclusion of partnership contracts.
Article 28- Projects Progress
The responsibility for evaluation and supervision of the projects’ progress up to the project exploitation shall be borne by the relevant specialized department and financial control of the project shall be carry out by the Deputy of Administrative and Financial, in coordination with the Finance, Economic & Investment Development Department in the name of IMIDRO.
Article 29- Activities of the Partners
IMIDRO’s partners activity shall be exactly conform to the provisions of the partnership contract and/ or Article of Association of the company and any activity out of the scope of work of the contract or Articles of Association shall not be permissible, and if required, may be carried out based on a justification report and with approval of the IMIDRO Executive Board.
Article 30
This regulation comprising of (30) Articles and (2) Notes has been approved by the Executive Board and shall be binding from the date of its approval.
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In the name of GOD
Regulations for
Partnership in Implementation
of Mine & Mining Industries Projects
1. Objective
This regulations has been drafted in regard of implementation of the clauses (6) and (7) of the Article 9 of IMIDRO Articles of Association and in order to invest in development and promoting of mine exploration, partnership in equipping, extraction, mineral processing and mines renovation, partnership in construction, development and renovation of mining industries, partnership in provision of infrastructures such as rail way, road, water, power and gas supply as well as partnership in other activities which facilitate IMIDRO’s objectives.
2- Scope of Application
This regulation will be applied within IMIDRO, as well as its affiliated companies and independent projects.
3. Definitions
In this regulation the Organization means the Iranian Mines and Mining Industries Development & Renovation Organization (IMIDRO), Executive Board means the Executive Board of IMIDRO and the Committee means the Investment Committee of IMIDRO.
4. Procedure Description
Chapter 1- General
Article 1- The Projects For Partnership & Investment
All types of the following projects fall under investment and partnership both in implementation and exploitation:
A. Mine exploration and review and study of assay of all kind of mine reserves in category (2) which are the subject of sub clause (b) of Article (3) of the Mine Act;
B. Extraction, ore dressing and mineral processing projects which are subject of sub clause (b) of Article (3) of Mine Act;
C. Mining and metallurgy construction and development projects;
D. Mining and exploitation machinery renovation projects;
E. Mine and mining industries production lines renovation and reconstruction projects;
F. Value added creation projects in mine and mining industries sector;
G. Infrastructure projects for mine and mining industries units;
H. Localization and transfer projects of high-tech and new technologies in mine and mining sector;
I. Other projects as discerned by the investment committee of IMIDRO;
Note 1: in the exploration projects, IMIDRO carry out preliminary measures such as delineation of the exploration area, obtaining approval for blocking the area in the name of IMIDRO from the ministry of industry, mine and trade, collection or preparation of the required basic data such as airborne geophysics, reconnaissance operation, nominating new exploration indices as well as classification of the indices resulted from exploration operation and definition of the exploration areas containing the indices. Then the exploration area is put on the tender and the value of the mining area will be paid to IMIDRO by the selected bidder, or alternatively is considered as IMIDRO’s equity in IMIDRO– bidder joint company. IMIDRO in compliance with the Article (44) of the Constitution and its implementing regulations will form a joint company with the investor (the selected bidder). Necessary measures for the formation of the joint company such as partnership contract and or article of association, holding the Founders Assembly (if required), selection and nomination of the members of the board of directors or mangers will be undertaken by the partners. After determination of the sharing structure of each party, the exploration license or the ministry approval will be issued and based on the services described on the back of the license, the joint company will mange exploration operation until exploitation of mine reserves and issuance of the exploration certificated, then, the company will take measures to equip and develop the mine. In this regard, IMIDRO share percentage will be negotiable. It is clear that required understandings in the joint company regarding work implementation will be made among the partners.
Article 2- Types of IMIDRO Equity
IMIDRO equity which will be used in partnership for implementation of the projects in mine and mining industries will be one the followings:
A. The value of the mining area;
B. Assignment of the concession of the exploration undertaken;
C. Assignment of exploration certificate and exploitation license;
D. Rendering technical, engineering as well as managerial services in exploration, exploitation, ore dressing and mineral processing of mine and metallurgical industries;
E. Supply of exploration and exploitation equipment;
F. Supply of production line machineries and equipment;
G. Provision of technical and technological know-how required by the project;
H. Partnership in investment for projects implementation;
I. Other items discerned by the investment committee of IMIDRO;
Article 3- Criteria for Acceptance of the Projects
The most important criteria for the projects acceptance for partnership in implementation are as follow:
a. Being in line with IMIDRO objectives and priorities;
b. The presented technical, economical & environmental feasibility study;
c. Creation of higher relative advantage and value added;
d. Transfer and attraction of superior technology and being environmentally compatible;
e. Being internally and externally marketable;
f. Job creation for the university graduates;
g. Suitable investment return rate ;
h. Development of economic activities in the deprived areas;
i. Creation mining infrastructures;
Article 4- Persons Eligible for Partnership
IMIDRO shall undertake partnership in the activities subject of the this Regulation with the following persons, in compliance with provisions stipulated in this
Regulations and the Articles of Association approved by the Executive Board:
a. Legal and real persons including initiators, inventors, innovators, entrepreneurs and generally geologists, mine engineers as well as metal and non-metal specialists;
b. Real and legal persons and cooperative requesting for activity in the projects subject of Article (1) of this Regulation;
c. Iranian legal persons whose production activity place is in Iran but part of the share belongs to the investors resided abroad;
d. Foreign legal and real persons approved by the OIETAI;
e. Other real and legal as indentified by IMIDRO investment committee;
The persons mentioned in the above clauses shall qualify at least one of the following conditions:
• Capability and competence
• Having background in partnership in mine and mining industries and/or shareholding and managing in the related areas.
• Suitable financial and economical situation of the partner (based on the attached table) and the equity as determined by the investment committee and approved by the Executive Board of IMIDRO.
Note 2: The foreign investors who obtain investment license from OIETAI can invest and participate in partnership, however, local investors shall take part in the partnership and investment in IMIDRO projects, only through bidding process.
Article 5- Conditions for Admission of Foreign Capital
Admission of foreign investment shall be made in accordance with the provisions of the Foreign Investment Promotion & Protection Act (FIPPA) and its implementing regulations enacted by the Islamic Consultative Assembly on 10/03/2002 and by the Expediency Forum on 25/5/2002 and with the observance of the prevailing laws and regulations for the purpose of development of the mine and mining activities based on the following criteria:
- Bring about economic growth, transfer of know-how, enhance mine exploration, upgrade exploitation technology and mineral processing;
- Enhance production technology and promote products quality and technical specifications in mining and metallurgical industries, so that to comply with the environment protection criteria and destruction of basic resources, specifically natural and water resources;
- Bring about relative advantage and enhance mineral product value added;
- Promote job creation opportunities and export boost;
- Provide financing required for the investment;
Article 6- Foreign Investor Equity
Types of foreign capital, cash or non-cash, which is imported into the Country by foreign investor include the followings:
a. Cash funds in the form of convertible currency through banking system or authorized money changing offices or through other ways;
b. Machineries and equipment;
c. Tools and spare parts, CKD parts and raw materials, additive & auxiliary materials;
d. Patent right, technical know-how, trade names and marks and specialized services;
e. Transferable dividend of the foreign investor;
f. Other permissible items approved by the Council of Ministers in accordance with FIPPA;
7- Authorities to Propose the Projects
The investment projects may be proposed by one or combination of the following authorities:
a. IMIDRO or its subsidiary companies;
b. The Ministry of Industry, Mine & Trade;
c. The Organization for Investment, Economic & Technical Assistance of Iran (OIETAI);
d. Real and Legal persons, private and cooperative;
e. Foreign or Iranian real and legal persons using foreign capital;
f. Explorers, initiators, inventors, innovators, entrepreneurs and generally geologists, mine engineers as well as metal and non-metal specialists;
f. Other investors;
Article 8- Method of Calculation and Assignment of IMIDRO Equities
IMIDRO equities in partnership will be calculated as following and considered as IMIDRO shares in the existing and established units:
a. The mining area will be initially valued by an official expert, then bids will be called and the highest bid amount ( the amount proposed by the selected bidder) will be considered as the value of the mining area;
b. Machineries and equipment will be valued on the price of the day;
c. Technical know-how, license right and ... will be calculated based on price of the day;
d. Cash investment will be proportionate to the partnership;
e. Land, building, landscaping and other expenses will be valued based on the expert price of the day;
f. The value of the items above shall be confirmed by the official experts of the Ministry of Justice;
Chapter 2- Work Process for Partnership
Article 9- Nomination of Partner
The applicant for partnership who is nominated by one of the authorities as referred to in Article (7), shall submit his proposal together with the required documents to the Finance, Economic and Investment Development Management of IMIDRO and fill in the related forms which have been prepared based on the specifications of the projects. (local investors who are willing to enter into partnership with IMIDRO for their independent projects shall also go through this process).
Article 10 – Preliminary Review
After preliminary review in accordance to the defined process, the proposed project will be examined by the specialized departments. At the same time, the competency and capability of the investor will be examined. Then in order to determine the facilities, technical, financial and managerial capabilities of the investor as well as objectives, implementation process and the effectiveness of the project and also the method of cooperation and clarify duties of each parties in the partnership after preparation of the preliminary reports, the proposal will be reviewed in accordance to the prevailing rules and regulations at the Investment Committee based on the submitted documentation. The following shall be paid attention in the process of review:
a. Estimation of the initial capital and exploitation expenses;
b. Determination of the capacities and products;
c. Economic analysis and method of financing;
d. Products marketing;
e. Estimation of the financial credit and the manner of payment each party’s share;
f. Environmental issues;
The committee, taking into account the above-mentioned factors and in compliance with the terms and conditions in partnership principles after acceptance or rejecting of the proposal, will send results to the Executive Board Secretariat within 15 days in order to the obtain the Executive Board approval.
Article 11- Project Final Review
The Committee approval will be put forward in the executive board meeting and will be reviewed based on the following items:
a. The Committee opinion;
b. The sharing structure if each partners;
c. The project location & executive schedule
d. Estimation of the required financial credit
e. License contracts and technical assistance
Article 12- Project Approval
The approval of the project in the Executive Board and notification of the same by the Chairman of the board shall be considered as the issuance of the investment license in the approved project and provision of the required credit for settlement of IMIDRO’s share from local or general or resources.
Chapter 3- Implementing Regulations for the Projects In Partnership With the Local Partners
Article – 13- Preparation of Partnership
After approval of the project in the Executive Board and communicate of the same to the related deputy, IMIDRO will take the next measures to go into partnership, taking into account the provision of the partnership agreement.
Chapter 4- Work Process for the Foreign Investors
Article 14- Attraction of Foreign investment
Foreign investor shall be nominated by IMIDRO subsidiary companies, inside or abroad the country, the Ministry of Industry, Mine and Trade and its subsidiary organizations as well as the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) and other relevant organizations or direct referral of the foreign investor.
Article 15- Methods of Foreign Investment
Admission of foreign investment may be carried out by one of the following methods and shall benefit from privileges of FIPPA.
A. Foreign direct investment in the fields in which private sector activity is permissible.
B. Foreign investment in all fields within contractual arrangements of “Civil Participation” , “Buy-back”, and “Build-Operate-Transfer (BOT)” schemes in which the return of the investment and related benefits only results from economic performance of the project, as well as other methods referred to in FIPPA and its implementing regulations as amended, and also other international schemes as approved by the Investment Committee.
Article 16- Investigation of Foreign Investment
Principle and preliminary investigations, detailed feasibility studies and detailed definition of the project shall be carried out by the specialized departments, and the resulting reports will be then set forth in the Investment Committee. Approved by the committee, the reports will be sent the Executive Board for approval.
Article 17- Principal and Initial Investigations
Foreign investment proposals for the intended activities within the framework of FIPPA, will be carried out through the following stages under supervision of a committee comprising of the Finance, Economic and Investment Development Department as well as the specialized departments of IMIDRO:
a. Carry out initial negotiation with the investors and reviewed the technical, financial and managerial capabilities and their backgrounds by IMIDRO and submit the evaluation report by the specialized departments in accordance with the work process and final submittal of the same to the Chairman of the Executive Board;
b. Receipt of the written application from the investor;
c. Taking viewpoint of the Chairman of the Executive Board;
d. Continue negotiations with the applicant in order to determine framework and methodology of work implementation as well as carry out pre-feasibility studies;
e. Drafting agreement on the work principles, feasibility study and breakdown of the duties;
f. Determine the capacities and products;
g. Market study report;
h. Agreement on the investment method and the manner of financing of the projects financial facilities;
i. Estimation of the required investment as well as economic analysis of the project;
j. Report to IMIDRO Investment Committee as well as the foreign investor for review and agreement to proceed with the work (the First Approval);
Article 18- Detailed Feasibility Studies
After receipt of the Executive Board’s agreement to continue the work, a Letter of Understanding shall be drafted for preparation of the feasibility study and start up of the work stages, by a committee comprising of the Finance, Economic and Investment Development Director, as well as the specialized departments, with respect to the followings:
a. The names of the partners and the proportion of their shares;
b. Location of the project;
c. Description of scope of services of the feasibility study;
d. Determine the duties of each partner in this study;
e. Estimation of the required financial credit to carry out detailed feasibility study, the manner of payment and the share of each partner;
f. Determine raw material, additives and auxiliary material regarding mining and metallurgy industries;
g. Principal products & capacities of the project regarding exploration, extraction, ore dressing and mineral processing;
h. Selection of a project manager and members of the strategic committee (if necessary);
i. Submit progress reports to the strategic committee;
j. Agreement of raw material supply contracts, marketing, license and technical assistance, land, infrastructure facilities, work force, management, insurance and method of work implementation;
k. Required agreements with financial resources;
l. Project implementation schedule;
m. Agree on the principles of the partnership agreement;
n. Fill in the forms attached to the FIPPA;
o. Preparation of investigation final reports;
p. Submit the report to the Executive Board as well as to the foreign investor to take their viewpoints and approval or agree to continue the work into the next step (the Second Approval);
Article 19- Project Detailed Definition
After obtaining the Second Approval, those parts of the basic and detailed engineering works which is required for investment and project implementation shall be carried out by the following order:
a. Preparation of a bankable technical, economical and environmental feasibility study (detailed feasibility study);
b. Submit the feasibility report to the Executive Board and the foreign investor(s) to take their viewpoints and obtain their final approval;
c. Sending the completed forms and questionnaire of FIPPA to the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI);
Article 20- Final Decision Making on the Joint Investment
The Executive Board and the investor(s) shall, taking into account the report referred to in the Article 19 as well as their legal and organizational authorities and based on the approval received from OIETAI, decide on the implementation or non- implementation of the project. (Final Approval);
Chapter 5- Execution of Partnership with Foreign Investors
Article 21- preliminary Measures
After final approval of the project by the Executive Board and the partners, the following measures shall be taken:
a. Signing of the partnership contract or Articles of Association;
b. Holding Founders Assembly (if required);
c. Selection and nomination of the board of directors’ members and or partners’ directors (if required);
d. Sending application to the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) for FIPPA coverage;
e. Signing of all original and subordinate contracts;
f. Provision of IMIDRO’s equity share;
Chapter 6- IMIDRO and Common Projects Regulations (in case of IMIDRO share in partnership)
Article 22- Project Manager
The project manager will be the coordinator and executor of individual stages of the partnership process up to the stage of the company registration and shall be proposed by the related Deputy and appointed by the Chairman of the Executive Board. The project manger shall report to the related Deputy.
Article 23- Combination of the Executive Board of the Project (in case of IMIDRO share in partnership)
The project executive board shall comprise of several experts having technical, financial, economical, legal, commercial as well as planning expert knowledge. The member of the projects executive board will be nominated by the Chairman, based on sharing percentage of IMIDRO in partnership, and shall cooperate up to stage of company registration. In case of the company formation, and if deemed appropriate by IMIDRO, members of the project executive board will be appointed as the members of the board of directors. Since in most cases full time working for the members of the executive boards for each of the projects shall not be necessary, the members of the executive boards shall work in parallel with individual projects.
Article 24- Strategic Committee
The strategic committee will carry out the duty of coordination between the partners to create required facilitation in order to reach the project’ objectives during different stages of the project implementation within the framework of the schedule agreed by the investor’ partners. The strategic committee will be comprised of the partners’ senior managers as well as the project managers selected by the two parties. The numbers and combination of the members will be determined, separately as required.
Article 25- Budget
Provision of the expenses for different stages of partnership process of IMIDRO’s share which shall be forecasted in IMIDRO annual budget shall be borne by the Deputy of Financial & Administrative. The account of each project’s expenses book shall be kept separately.
Article 26- Time Schedule
The time schedule of the project implementation shall be drawn up separately, based on the type of the project, the amount of investment as well as the rules and regulations governing over the partners.
Chapter 7- Others
Article 27- FIPPA
All partnership contracts signed with the foreign investors and/or Iranian investors with foreign capital shall fall under FIPPA enacted by the Islamic Consultative Assembly on 10/03/2002 and by the Expediency Council on 25/5/2002 as well as this regulation and is considered as the main approval for the conclusion of partnership contracts.
Article 28- Projects Progress
The responsibility for evaluation and supervision of the projects’ progress up to the project exploitation shall be borne by the relevant specialized department and financial control of the project shall be carry out by the Deputy of Administrative and Financial, in coordination with the Finance, Economic & Investment Development Department in the name of IMIDRO.
Article 29- Activities of the Partners
IMIDRO’s partners activity shall be exactly conform to the provisions of the partnership contract and/ or Article of Association of the company and any activity out of the scope of work of the contract or Articles of Association shall not be permissible, and if required, may be carried out based on a justification report and with approval of the IMIDRO Executive Board.
Article 30
This regulation comprising of (30) Articles and (2) Notes has been approved by the Executive Board and shall be binding from the date of its approval.
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