Despite the growing insecurity in Afghanistan and gun battles with the Taliban rebels in the capital, Kabul, Indian companies are offering billions of dollars for a contract for the iron ore mine in a central area of the country. A consortium led by state-run Steel Authority of India (SAIL) could invest up to $ 6 billion in mining, railways and a steel mill in a race with China in commodities slot for two of the fastest growing economies in the world.
The offer also signals India plans long stay involved in Afghanistan after 2014, when US-led forces to complete a withdrawal. The contract for the mines in the province of Bamiyan Hajigak is potentially the largest foreign investment in war-ravaged Afghanistan, but it could be complicated by Pakistan, which is sandwiched between India and Afghanistan, and closer cooperation between the two fears.
“We will be guided by national interests to achieve an Afghan decision,” said a government official after six bidders, two of them Indian, created for this week Hajigak.
“If an Indian company wins then so be it,” said the official, dismissed concerns that India’s deeper engagement will stoke new tensions with Pakistan.
India is the largest regional donor Afghanistan and the sixth largest in general. It has pledged $ 2 billion in projects, the construction of a new parliament building to construct a highway to Iran, India’s “soft power” project.
Old enemy Pakistan publicly derided such efforts to influence safe in what it sees as its backyard, but Islamabad has involved the government in Kabul that it feels too cozy with New Delhi.
Preferred bidder
For Hajigak were bidding with four blocks of an estimated reserve of 2 billion tons of mine received from the consortium led SAIL, US-based ACATCO LLC, Iran Behin-Sanat Diba and Gol-e-Gohar Iron Ore, Canada’s Kilo Goldmines and Corporate Ispat Alloys, another Indian firm.
Afghan officials will name a preferred bidder after a 45-day evaluation process and the SAIL-led consortium is seen as the best chance.
“India is a strong contender without a doubt,” the official said, adding that the bidder’s experience in mining, financial standing and offered royalties would be factors.
He drew attention to President Hamid Karzai’s position that countries that Afghanistan had helped in the past should be given priority in the development of its resources.
While the United States is still seen as an occupying force, despite pouring billions of dollars in aid to Afghanistan, India’s lower profile efforts, focusing on key issues, such as roads, electricity and education, have won goodwill.
But India’s interests are often the target of attacks in the last decade.
The embassy in Kabul was hit by two bombings in 2008 and 2009, killing 75 people and injured hundreds. Indian engineers working on projects in Afghanistan have been kidnapped and hostels for Indian workers have been attacked.
The Taliban have claimed many of these attacks, but India accuses Pakistan spy agency military, the ISI says it is trying to undermine New Delhi’s influence.
It is feared that an Indian-run mining concession, a large and tempting target.
But with an economy ravaged by more than three decades of war, the Afghan government is under tremendous pressure to projects involving foreign investment to ensure prosperity.
PROTECTION
Jawad Omar, a spokesman in the mines ministry, said a 7000-strong protection force is increased mine to mine sites, including Hajigak protection.
So far, mainly Chinese and Indian companies have shown interest in mining Afghan sources.
China’s National Petroleum last week was chosen as a preferred bidder for an oil field in northern Afghanistan, where the country a step closer to a second major deal after winning a $ 4 billion copper project in Logar Province in 2007.
Global miners such as Rio Tinto and BHP Billiton are away from Afghanistan was due to safety concerns, but also because of high production costs in particular in the transport of deposits of the isolated, mountainous country with few roads and few other infrastructure.
For India, a country Hajigak direct route is, because it would mean traveling through Pakistan.
Other options are to transport the ore west to the Iranian port of Chabahar connected by roads that Indian engineers have built. The ore can be moved by slurry pipeline after it slush, but it can also mean Pakistan.
New Delhi seems to be banking on the fact that the overall security situation will improve in the coming years.
“The fact is a lot of things can change from now until the time it reaches production stage, which I understand is years away in such operations,” said an Indian diplomat in New Delhi.
Hajigak exploration is due to next year and the development of my start takes four to five years. Then the infrastructure of roads and rail, which takes the developer to build a few years.
source:reuters
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