Indian companies are bidding on iron ore mining contracts in Afghanistan. The mine in question in Bamiyan province is being eagerly bid for despite security issues.
Steel Authority of India, the Indian state run company, is leading a consortium to invest close to $6 billion in the entire mining process which would include the mine construction, railroads and a steel plant. The aggressive bidding stems from the competition with China to lock in available raw material for steel making.
The Hajigak mines in Bamiyan province will provide Afghanistan with see the single largest foreign investment in the country. The project may be complicated by Pakistan which is uncomfortable with the close cooperation of the two neighboring nations.
Mining giants like Rio Tinto and BHP Billiton have stepped out of the bidding due to the major security concerns and the high production costs. Exploration is expected to begin next year at the mine and development will take four to five years more.
In order to protect mining sites a 7,000-strong mine protection force is being raised as per spokesman in the Afghan mines ministry. Jawad Omar, the spokesman, said that this force would also be used to protect the Hajigak mine.
President Hamid Karzai’s position that countries which had helped Afghanistan in the past must be given priority in developing its resources would weigh heavily in favor of Indian firms bidding for the project.