A total of 22 companies have confirmed their EoIs to the Afghan government for exploring and mining the Hajigak mine located in the mountainous Bamiyan province, 130 km west of Kabul having an estimated reserves of 1.8 billion tonne of high grade iron ore. An estimated expenditure of about Rs 10,000 crore is required to develop the mine and its peripheral infrastructure for evacuation of the mineral.
Afghan mines minister Wahidullah Shahrani, in a letter on January 17, said of the 22 shortlisted firms, 15 are Indians. They include big-ticket names like maharatna Steel Authority of India Limited (SAIL), navratna behemoths NMDC and Rashtriya Ispat Nigam Limited, besides private sector giants like Tata, Essar, Jindal Steel and Power, Ispat, Monnet Ispat, JSW, Jindal Saw among others. Interestingly, Iranian firms like Gol-e-Gohar Iron Ore and Behin Sanate Diba have also tendered their EoI.
In his letter Shahrani said his ministry was finalising the bidders package for all the phases of the process. It is anticipated that the bidders due diligence period will start on or about March 1, and extend at least through August 3. We appreciate your interest in the Hajigak project and look forward to receiving a competitive bid from you, the Afghan minister said.
Soviet studies reveal that the said mine was amendable to open pit mining methods. In the EoI floated recently, the Karzai government said it would conduct a bidding process for multiple exploration concessions, and the selected bidder would be granted mineral concessions under the Afghan Mineral Law, 2010. The Afghan government is also keen that the Indian companies to set up steel and other iron ore processing plants near Hajigak.
Afghanistan was believed to be sitting on over $2.5 trillion worth of untapped mineral deposits. The country has a huge copper mines in Balkhab and Aynak areas.
Shahrani had met Indian mines ministry officials in November last and expressed his countrys desire to enter into a memorandum of understanding (MoU) with India to promote mining and end use industries in Afghanistan. The external ministry too has been asking the mines ministry to evaluate the response from the Indian companies. Though Indian firms confirmed their EoIs, but they are unlikely to go solo in Hajigak and are expected to bid as consortia. A steel company official said they might have to begin from a scratch as there was virtually no infrastructure there and they would have to build it including a railway network, roads and power plants.