Estimation of energy demand function in operating mines in Iran

Energy is one of the important inputs in mining. Given the importance of energy in the mining sector and the increase in the price of energy carriers in recent years, analyzing the structure of energy demand is of great importance. This study aims to estimate the demand for energy carriers’ function in operating mines across the provinces of Iran during the period 2009-2017. To do this, using profit maximization, first the energy demand function is derived and then the generalized least squares (GLS) method is used to estimate the model. The results of the study show that the real price of energy in accordance with the law of demand has a negative and significant effect on energy demand, and value added and physical volume of production in operating mines have positive and significant effects on energy demand of carriers. This study also examines the effects of other variables such as the real price of labor and capital and the kind of ownership on energy demand in in operating mines in the provinces of Iran.