Afghanistan Mines interview: banking on on mining, with copper and iron ore to the fore
The country believes there is more likely $1.9 trillion in resources hidden beneath its surface but, the proof is going to take a lot of exploration and considerable infrastructure
Posted: Saturday , 26 Jun 2010
Afghanistan has some ambitious plans to develop its undoubted mineral potential which could see a 200,000 t/y copper mine producing within about another three years and first iron ore from a massive deposit within five years. Whether these goals can be achieved remains to be seen but from the Afghan side there is tremendous enthusiasm to see mining development get started.
The recent article in The New York Times talking of mining potential based on $1 trillion in resources raised many eyebrows in mining circles. However, it did raise worldwide interest and set the idea of Afghanistan's potential in a lot of people's minds. Actually, the government itself maintains that potential is more likely $1.9 trillion, but also concedes that these are very early stage `ball park' figures. There are a good handful of under-explored, prospective countries around the world about which one could speculatively talk of $1-2 trillion in mineral resources. In all cases, including Afghanistan, the proof will take a very great deal more work.
The truth is that very little work has been done on Afghanistan's exploration potential since the Soviets left the country. They and their predecessors, like the British, did, however, leave enough good quality records (particularly those from the Soviet era) to indicate great mineral potential. I met with His Excellency Wahidullah Shahrani, the Minister of Mines, his Minerals Adviser Dr Atiq Sediqi and other members of the team in London on June 25, and discussed this further. He told me that a modern geological data centre is being established in Kabul.
This decade has seen a significant amount of work done on the old geological reports. Both the US Geological Survey (USGS) and the British geological Survey (BGS) have been doing resource estimate work and the USGS has flown some surveys.
While it's still early days, work so far has led to MMC (a joint venture of China Metallurgical Group and Jiangxi Copper) winning the tender for the Aynak copper project, south of Kabul, and that project progressing, and the imminent tendering of the Hajigak iron ore deposit - possible resources over 1,000 Mt at 63% Fe.
Afghanistan has great potential in resources that will not need a lot of infrastructure (like gold in the north of the country and lithium) but the first modern mines are likely to be Aynak and Hajigak, which will require considerable infrastructure.
MCC will provide a great deal of the rail infrastructure needed for both of those mines. It is building, at an estimated cost of $3 billion, a rail line from Aynak to Kabul and then east to the Pakistan border and another north towards Kunduz and the Tajikistan border. This branch going west and then north would require a spur of just 15-20 km (at a cost of perhaps $35-40 million) to connect to Hajigak. That rail system will not be tied solely to Aynak and will be available for use by other paying customers. MCC will also build a 400 MW power plant (requiring 1.2 Mt/y of Afghanistan's plentiful coal) and will supply 200 MW of this to Kabul.
Aynak is a 10 Mt copper resource. MCC is currently working on social, environmental and engineering studies. All of which should lead to the completion of the full feasibility study by January 2011. This looks like becoming a mine producing 200,000 t/y of copper for a 30 year life of mine.
The Minister demonstrated what can be done with the security situation in the country. He explained that the area of Aynak in Logar Province was "relatively insecure." Today, with the help of the locals, who wish to see development and employment, and a 1,500-strong Afghani protection unit, it is a safe area where there have been no incidents for two years.
Hajigak is situated in the beautiful and historic Bamyan Province, 130 km west of Kabul, the Afghanistan capital. An Afghan-Soviet project, between 1963 and 1965, carried out an extensive study which mapped and described the deposit in some detail. That demonstrated the mineral potential of the region, and estimated the resource at 1,800 Mt, but that is at a confidence level below `Inferred' and will need a lot more than the four holes that have been drilled into it so far to prove it up.
North of the current Aynak copper project, closer to Kabul, there is more copper and another project will be tendered there. Other tenders to come in the mid-term are likely to include the Balkap copper prospect, Sheberghan oil and gas, Nuristan gemstones and lithium and Badakhshan gold.
John Chadwick is Editor/Proprietor of International Mining magazine - www.im-mining.com