Afghanistan extends deadline for iron ore bids

The deadline for bids for Afghanistan's giant Hajigak iron ore deposit has been extended by a month to September 4 at the request of companies interested in the project, the country's mines minister said on Saturday. The Hajigak project, which straddles the central provinces of Bamiyan, Parwan and Wardak, has deposits of 2 billion tonnes with an estimated worth of $350 billion and is described by the Afghan government as Asia's largest unmined iron deposit.
The United States has trumpeted Afghanistan's rich mineral deposits as the key to future prosperity, but experts say the bounty is years, even decades away and point to massive security and infrastructure challenges for potential investors. Mines Minister Wahidullah Shahrani said 17 companies, mainly from India, were interested in developing the deposits and would now have until September 4 to submit their bids. He said he expected to award the contract some time in November.
"Because of the complex nature of the operation and the massive size of the deposit, (most of the companies) have asked for a one-month extension, which we have agreed," he said. The World Bank on Saturday gave Afghanistan a $52 million grant, to be disbursed over three years, to help manage the country's natural resources effectively and transparently, including completion of the bidding process for the Hajigak project. It is not the first such grant. In 2006, the World Bank gave the country a $30 million grant to help manage its natural resources, which was followed by an additional $10 million in 2010.
Acting World Bank Director Josephine Bassinette cited the government's awarding of a contract to develop the Aynak copper mine south of Kabul, which is due to start production in 2014, as partly a result of the previous grants. "The success of the Aynak copper mine, which was supported under the first project, is really a testament to the professionalism and the hard work," she acting World Bank Director Josephine Bassinette told a news conference on Saturday.
The Aynak copper mine was not without controversy, however, after accusations were widely reported in 2009 that Shahrani's predecessor, Mohammad Ibrahim Adel, had accepted a $30 million bribe to award the contract in 2007 to a Chinese firm. Adel denied the allegations and said China's top copper producer, Jiangxi Copper Co, together with China Metallurgical Group Corp, had fairly won the contract to develop the copper mine.