Investment and methods of attracting and financing capital

Investment and methods of attracting and financing capital

The most important factor in investing and attracting capital is the risk of investment. Investors are seeking to reduce this investment risk. Risk reduction is generally done in three ways:

  1. Completion of technical and economic information related to the project
  2. Receiving confirmation from relevant technical and financial specialists
  3. Insurance of capital

In exploring the first and second items can not generally reduce the risk of capital, because the unknown space exceeds information and there is a very high uncertainty. Therefore, the main factor in attracting exploration capital is insuring the capital injected into the exploration.

Also, in order to realize sustainable development in the field of exploration, creation of security of investment in exploratory activities, as well as guidance and management of this investment in line with the country's major objectives, was established by Article 31 of the Mining Law approved in 1998 by the Parliament of the Islamic republic of Iran to establish the Investment Fund for Mining Activities according to the Articles dated 6/6/2001 of the delegation of the Ministry of Industry and Mines on proposal No. 12375/100 dated 17/2/1999. The insurance fund for investment in mineral activities is a merely insurance company and covers the investment risk in the exploration, extraction and processing of minerals. The fund coordinates with the facility lending and operating banks, and if the facility lender wants to pay the loan to the applicant at the risk accepted by the insurance fund, the Fund will do its best in this regard.

Reducing the risks of investing in exploratory activities through the issuance of investment and credit insurance will achieve the following objectives:

  1. Sustainable development of the exploration sector
  2. Creating job opportunities in the exploration sector
  3. Paving the grounds for the export of mineral products
  4. Creation of currency revenues for miners and, therefore, strengthening the country's exploration
  5. Developing and flourishing exploration and consequently, mining industries and related job opportunities.
  6. Increasing the share of mine exploration in the country's economic and social development