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Iraq faces rocky road in mining investment hunt
High-level Iraqi government officials converged in London on Wednesday for the first ever Iraq Mining conference to show how determined the oil-rich country is in trying to secure investors into its long-neglected mining sector.
September 8, 2011 4:18 by Reuters
However, the conference heard Iraq will need to resolve a number of issues, such as security and the introduction of a mining law, before it can start to attract foreign investment into its non-oil resources sector.
“Iraq is rich in various types of mineral resources…and has many promising shows of lead, zinc, copper and chromium in Kurdistan,” Sami al-Araji, chairman of Iraq’s National Investment Commission, told the conference.
Iraq is trying to shake off the legacy of years of violence, sanctions and economic decline by opening up its financial and industrial sectors and luring foreign investment and expertise to help it rebuild, however security issues still remain a big concern for potential investors.
Deputy Prime Minister Rozh Nouri Shawis said the government was reviewing the mining law.
While its autonomous region of Kurdistan has the greatest potential for metal resources, it has no mining code.
The mountainous region of Kurdistan also throws up additional challenges for mining investors.
Shawis told reporters that a company that already invests in Iraq won’t enter Kurdistan because of the terrain.
“What’s in a meadow is easy, but what’s on a mountain is difficult,” he said.
The lack of infrastructure and power is another problem.
However, Shawis said mining was less complicated than oil and gas, where transportation through various countries can be an issue.
In an attempt to encourage investment, Iraq is offering companies a 10-year exemption from taxes, extended to 15 years if a project is developed with a local partner.
Iraq has one of the largest phosphate reserves in the world and is rich in many construction and industrial materials, such as sulfur and limestone, but the size of its metal potential is unclear until further exploration work is carried out. (Reporting by Julie Crust; editing by James Jukwey)