Afghanistan opens up mining sector, to float $10-bn tenders next yr

Afghanistan will float tenders to give exploitation licences of mineral resources worth $10 billion, a major initiative to allow private sector companies to enter into the state-controlled mining sector. Wahidullah Shahrani, minister of mines, Islamic Republic of Afghanistan, at the CII-organised 10th International Mining & Machinery Exhibition, said the tenders for exploitation licences will be floated next year and that the last date of responding to the expression of interest already floated is January 13, 2011.

Asked about security concerns, he said, “Don’t look into the negative issues of political uncertainty and instability. Look into the positive aspects of exploiting the mining potential.” Afghanistan has $3 trillion worth of reserves under proven category and the reserves under inferred category are yet to be valued. “We actually intend that the companies, which get exploitation licences, also conduct exploration through procuring licences via the bidding route and help Afghanistan, still a virgin area for mining companies, unleash its mining potential,” said Shahrani.

Afghanistan has reserves of metals like gold, copper, chromite, iron ore, borates and rare minerals like lithium and cobalt. In fact, Afghanistan has so far got government aids like India’s $ 1.2 billion to reconstruct the country after the war. It is now looking for private sector investment and will immediately require $5-6 billion worth of investment to develop Hajigak, an iron ore rich area north-west of Kabul, Gautam Mukhopadhyay, Indian ambassador to Afghanistan, said.

“We want investment to develop transportation, power and other infrastructural facilities at Hajigak so that exploiting iron ore there becomes feasible. Indian companies can form consortiums to bring in investment at Hajigak,” Shahrani said, adding that his government could consider allowing Indian consortiums invest in the region escaping the tender route and making it a government to government affair.

Source – Financial Express



Executive at India Electron Exchange

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