Afghan govt reopens tender for giant iron ore mine

I / Kotal-e-kherskhan, Afghanistan September 25, 2010, 16:05 IST

The Afghan government today invited bids from international mining firms to develop an iron ore deposit said to be one of the world's richest, the mines minister said.

The Hajigak iron ore mine in central Bamiyan province is believed to hold up to two billion tonnes of high-grade iron ore, the main raw material used in making steel.

"The Hajigak iron ore deposit is open for tender as of today," said mines minister Wahidullah Shahrani.

"We are going to tender this today in Kabul on all government websites, all leading economic and mines journals for the expression of interest," he told reporters during a visit to the mine.

He said the mine would generate annual 300 million dollars in direct earnings for the Afghan government and USD 1.5 billion in indirect income for the country.

Afghanistan invited tenders last year to develop the mine but, receiving only a lukewarm response, cancelled the process after Shahrani took over the minister's post when his predecessor was removed amid corruption allegations.

He planned to travel to New York on Wednesday, he said, to persuade major miners to bid. He visited London earlier this year to drum up international interest in Afghanistan's mineral wealth.

Afghanistan is in the midst of a protracted war with Taliban-led insurgents which has intensified over the past year, with foreign-funded projects and construction workers often the target of attacks.

A study earlier this year by US geologists found Afghanistan had reserves of valuable minerals, including lithium, iron, gold, niobium, mercury and cobalt, on a larger scale than previously believed, worth about $1 trillion.

The Afghan government later called this a "very conservative estimate" and  put the value at up to $3 trillion.

During his June road trip to London, Shahrani vowed total transparency in the awarding of contracts to exploit the country's mineral wealth, which he said could net the war-torn country $3.5 billion a year by 2015.

Shahrani estimated that revenues from mineral, oil and gas reserves -- including 1.6 billion barrels of oil in the Afghan-Tajik Basin -- could wean Afghanistan off aid by 2015.

The Hajigak mine is located in harsh mountain terrain about 130 kilometres west of Kabul.