Abstract

Mines as an important sector of Iran's economy have a principal role on supply chain of the most of the economical sectors. The determination of relationship between major production function (PF) factors in mines is one of the necessary activities for efficient management of mine sector. In this paper, the best mine production functions were estimated using information of selected minerals. For this purpose, by defining efficient criteria the active mines of coal, ferrous, lead and zinc, copper, barite, kaolin and decorative stones were chosen as samples for analysis. All required information for these minerals was gathered through 1996 - 2005. Then, different forms of production functions were evaluated by employing of econometric methods and finally 4 models were chosen, these models were evaluated by using the information of all the operating mines in Iran and outcomes are compared with actual data. The results showed that Cobb-Douglass model is the most compatible production function for Iran's mines with regards to the parameters of capital, labor number, research and development costs and investment efficiency ratio. The model showed that research costs and investments on machinery and development have positive effects on mines' value added earning. In addition, it was shown that time has no positive effects on technological growth in Iran's mines.

Key words: Mine, production function, Cobb-Douglas, CES.