The Indian Consortium Is Back From Another Round of Discussion for Acquiring Mining Rights

Economic Times reported that the Indian consortium is back from another round of discussion for acquiring mining rights to the 1.8 billion tonne of iron ore reserves in Afghanistan, as the possible deal reaches a critical stage.

A highly placed source said that an agreement is likely very soon, between the war torn country and the seven members Afghan Iron & Steel Consortium once the issue of milestone linked termination clauses is resolved.

AFISCO was the chosen preferred bidder last November, getting rights to three of the four blocks and most of high grade Hajigak deposit, in the Bamiyan district, considered to have the largest iron ore deposits in the world. The consortium led by Steel Authority of India with an 18 % stake, includes NMDC and RINL who own 17 % each, JSW and Jindal Steel & Power with 16% and JSW Ispat and Monnet Ispat and Energy holding 8% and 4 % respectively.

Those involved in the negotiations believe delayed development of allocated coal resources in India and Afghanistan's own hurdles in pushing forward its other multi billion dollar mining deal at Aynak are posing problems in finalizing the deal.

An official involved said that the milestone related to termination clauses, were a bit of a concern. Increasingly in recent years, countries have sought to get the most from their resources as political awareness has grown of how resources can turn a non developed country around. Sources said that the next round may be the final one leading to an elaborate formal signing of agreement in January. Afghanistan will also be ratifying a new mineral bill soon.

The Indian consortium won the rights only after it committed to setting up a steel plant in addition to other financial commitments. The larger plans around the Hajigak deposit include a key 600 kilometer rail corridor linking Bamiyan to connect the new Chahbahar port in Iran. War torn Afghanistan envisages developing other mineral assets along the critical rail line in the future.

Afghanistan has identified its rich mineral resource as its biggest asset for economic growth. Recently it announced the preferred bidders for copper and gold deposits, including one that an Indian consortium had bidded for and lost.

Meanwhile, the USD 4 billion deal with the Chinese consortium of Metallurgical Corporation of China and Jiangxi Copper continues to face delays. Hajigak was the next major mineral deposit to be tendered, apart from an oil deposit grabbed by a Chinese firm again, far up north of the country. As with the Aynak project, coal is also expected to be facilitated for AFISCO's proposed steel plant.