Afghanistan put its Hajigak iron ore deposit back up for tender on Saturday, after taking it off the market last year, promising security for investors despite a worsening insurgency.
Afghan Mines Minister Wahidullah Shahrani said he hoped production would start by 2014 on what he said was a huge, high-quality ore vein, that offered investors a rare opportunity with reserves estimated to be worth as much as US$350 billion.
Security is likely to be the main concern to potential investors when Shahrani meets them at a conference in New York on Wednesday, with the insurgency at its most violent since the 2001 overthrow of the Taliban government.
PHOTO: AFP
The Hajigak deposit straddles Bamiyan, Parwan and Wardak Provinces, with only Bamiyan relatively peaceful.
Shahrani said that the Aynak copper mine south of the capital, developed by Chinese firms since 2008 and worth about US$43 billion, proved Afghanistan could protect important assets.
The government has a specially trained force to protect mines and other infrastructure, with many of its members drawn from villages surrounding the asset under guard.
“The community has been taking care of the Aynak deposit, even though that is in a very insecure part of the country ... in the last two years there has not been a single incident,” Shahrani told reporters visiting the mountainous region to the west of Kabul where the Hajigak deposit lies.
Villagers from nearby, mostly subsistence farmers, say they would try to protect any investment that brought jobs or infrastructure improvements, such as paved roads.
“Most of the young people have already left to find work, in Kabul or even Pakistan. I would very much like them to be able to stay here,” said Mohammed Sadiq, a 35 year-old farmer from Kotal Sufla village at the base of mountains that form Hajigak.
Shahrani expects the mine to create at least 7,000 direct, long-term jobs and many thousands more working in spin-off industries, such as services, construction and logistics.
“Mining companies know how to operate in insecure areas,” he said.
Expressions of interest are expected by mid-January, and Shahrani hopes to award the tender in next August, with at least two more years of detailed exploration to follow.
He did not say how much investment his government is seeking for the project, but forecast central government revenues of US$300 million to US$400 million per year once the mine reaches full production of an estimated 10 million tonnes a year.
A planned tender for last year was canceled, with the ministry citing the global recession and changes in the world market structure for iron as the key problems, although it came months after corruption allegations were levied against the mining sector in Afghanistan.
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