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Monday, October 31, 2011

Indian firms may land iron ore mining contract in Afghanistan

Sachin Parashar, TNN | Oct 31, 2011, 02.12AM IST

NEW DELHI: Shortly after it signed a strategic partnership pact with Afghanistan, India's engagement with Kabul is all set to blossom further with two Indian companies, one of them a government-backed consortium led by SAIL, likely to win the contract for iron ore mining at Hajigak in Bamiyan province.

In a country where -- according to US government estimates - there are untapped mineral resources worth $1 trillion, the Hajigak iron ore mining entails the single largest foreign investment by any country for such a project in the war-torn country.

SAIL and NMDC are heading a consortium of seven companies which has bid for the contract as a part of the Manmohan Singh-led government's initiative to further enhance India's role in Afghanistan, a country in which India has pledged investment worth $2 billion. Another Indian company which has bid separately is corporate Ispat Alloys.
According to Afghanistan's minister of mines Wahidullah Shahrani, the two Indian entities have "emerged as the most potential companies for Hajigak''. The final decision is likely to be taken by Afghan authorities in early November. Other companies from Canada, US and Iran too are in the fray. Foreign secretary Ranjan Mathai had met Shahrani during his visit to Afghanistan last month during which he is said to have pushed the case for Indian firms.

If the SAIL-led consortium does indeed win the contract, the deal will surpass the $4 billion contract signed by China for copper mining in the Logar province four years ago. In fact, the contract can help India dispel the notion that it is reduced to playing catch-up with China which has won most of the major mining contracts in Afghanistan.

The SAIL-led consortium has bid for all four Hajigak mining blocks. Government authorities have backed the bid maintaining that it makes strategic as well commercial sense to have a presence in mining in Afghanistan.

India has, so far, focused mainly on infrastructure development in Afghanistan, building roads, schools, power lines and hospitals. The Hajigak contract, which involves investment of $6 billion, will also establish India's presence in the country, which is gearing up to face security challenges on its own after 2014, for a very long time to come.

US geologists and government officials estimated last year that Afghanistan was sitting on unexploited mineral reserves such as copper, iron ore, lithium, gold and cobalt worth over $1 trillion.

According to Shahrani, however, another major contract for oil and gas exploration in northern Afghanistan Amu Darya is likely to go China's way.

The Times of India

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