War-ravaged Afghanistan will invite international tenders for exploiting its mineral resources – including iron ore, copper and gold deposits – next year, entailing investments of up to $10 billion, minister of mines Waheedullah Shahrani said.
The Afghan government intends developing high-quality iron ore resources in Hajigak – the largest such unexploited reserve globally – along with copper reserves in Balkhab and Northern Aynak.
“We expect an investment of about $6 billion at Hajigak. For the copper deposits, between $2-4 billion for Balkhab and another $2 billion for Northern Aynak,” said Shahrani.
Gold mines in Badakhshan and Ghazni provinces would also be made available to interested international companies, but these are expected to draw smaller investments.
“There is an estimated $3 trillion worth of resources in Afghanistan. In the next five to seven years, we expect resources to contribute between 25-30 per cent of our total GDP. For that, we are developing physical infrastructure, improving physical security and introducing transparent and efficient management,” the minister said during this address at the 10th International Mining and Machinery Exhibition.
Afghanistan has so far been successful in bringing China Metallurgical Corporation to invest about $6 billion for developing the Aynak copper deposit.
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Last year, it had invited tenders to develop the Hajigak iron ore deposits, containing about two billion tonnes of iron ore, but the process was scrapped by Shahrani earlier this year. The initiative has been taken up once again and and bids are expected to be submitted by January next year.
Indian interest
Although Indian firms showed some interest in the Hajigak iron-ore deposit when it was first offered, they pulled back citing security reasons. Regardless, the Afghan government is hopeful that companies from India will bid for them.
“We strongly encourage Indian companies to take the opportunity and we do believe that Indian companies, particularly for copper and iron ore, have very good capacity. In the next 30-50 years, there will be a significant increase in demand for minerals in India, for that we are encouraging Indian companies, and we do believe that they will be very competitive,” Shahrani added.
He said the Afghan government has established a special mine protection unit, comprising over 7,000 troops, exclusively for the country's mining sector and that “100 per cent of the security” would be the government's responsibility.
Shahrani said Indian majors like Ispat and Essar, along with ArcelorMittal and Vedanta, had shown interest in Afghanistan. However, he was reluctant to divulge further details.
Lithium reserves
The country has also identified significant reserves of lithium, a mineral that is seeing increasing demand in manufacturing batteries for hybrid and electric cars.
“We have huge deposits of lithium, but are interpreting the data. This process will be complete in the next four to six months. According to initial indications, it could be more than three times the Bolivian deposits,” said Shahrani.
Bolivia is understood to contain about half the world's known lithium reserves, so if Afghanistan's massive reserves are attested, it could be a game changer for a country that has seen its economic backbone crushed by decades of conflict.