Commodity Online
MUMBAI: Afghanistan is one destination several companies would like to stay away considering the increased terror threat in that nation.

However, five Indian mining companies are in the race for acquiring mining rights for the largest iron ore deposit in Afghanistan. Vedanta group’s Sesa Goa, Essar Minerals, Ispat Industries, JSW Steel and Rashtriya Ispat Nigam are bidding for the 1.8 billion tonne Hajigak iron ore deposit.

Reports appearing in India and China said China’s MCC and Tuwairqi Steel Mills of Pakistan are the two other firms shortlisted among the seven.

The ministry of mines had offered mining rights to the Hajigak deposits, 130 km west of Kabul and surrounding areas through a tender process in April.

The ore here has a high iron content of 62 per cent, and the deposits are suitable for open pit mining. There are 16 ore bodies, extending for 5 km and to depths of over 550 metres. The estimated value of the deposit would be nearly $10 billion.

Analysts said a maximum of 60 per cent of ore could be recoverable but there are veins of ore reaching down the side of a hill so there is potential for more deposits in the surrounding area. Nearby seams of coking coal would make it possible to set up an integrated iron and steel complex with a blast furnace.

Although the deposits are not far from Kabul, the terrain is remote and mountainous. It is also situated on the edge of an area that has seen a sharp rise in insurgent activity over the last three years.

A recent US Geological Survey (USGS) said Afghanistan might hold far higher amounts of minerals than previously thought, with iron deposits alone estimated at between five and six billion tonnes.

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