Afghanistan invites initial bids by Indian cos to develop iron ore mine

Discussion in 'Economy & Infrastructure' started by LETHALFORCE, Jan 26, 2011.

  1. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    http://timesofindia.indiatimes.com/...develop-iron-ore-mine/articleshow/7355094.cms

    NEW DELHI: Afghanistan has invited 15 Indian companies to make initial bids for an iron ore mine in the country, which if successful, could compel India to reconfigure diplomatic equations with Pakistan and Iran.

    The bids to develop the Hagijak iron ore mine in Bamiyan, Wardak and Parwan provinces were invited last week. These companies were out of a total of 22 companies who had showed interest.

    The Indian government is trying to make it a consolidated bid by the different Indian companies, in which case it could be a negotiated deal with Afghanistan. While the diplomatic effort with Afghanistan is being driven by the external affairs ministry, the endeavour to band together a consortium of the Indian companies is being driven by the mines ministry. "We promote private and public sector interests equally in foreign countries," said S Vijay Kumar, secretary mines.

    If successful, India will have to seriously rethink its diplomatic equations with both Pakistan and Iran. Quite apart from the security, India will need to answer a fundamental question: how to evacuate the iron ore from Bamiyan, in the heart of Afghanistan, to the nearest port?

    The Afghanistan-Pakistan transit trade agreement allows the movement of goods to India from Afghanistan via Pakistan. Sources said, that could be a possible route, even yielding transit revenues to Pakistan. However, given the parlous state of India-Pakistan relations, what are the bets that Pakistan will find a way of stopping that route? This route, said sources, is vulnerable in terms of security but it's the shortest. It was the same argument used for the Iran-Pakistan gas pipeline, but security concerns trumped that time.

    The other route is through Iran. India has already built a road to the Iran border in Afghanistan. If Iran and India could agree on India developing the Chahbahar port, it could be an easy way of getting the ore to sea. But here, the problem is two-fold. First, Afghan-Iran relations are in terrible shape at present, with Iran blocking the transit of fuel into Afghanistan. India and Iran have a deadlocked relationship, most recently hit by an oil payments problem.

    On the iron ore mine, the Afghan government has promised to shortlist companies who will make detailed bids by August, and wants the project underway in 2012. Indian companies like Jindal Steel, JSW Steel, Tata Steel, NMDC, Steel Authority of India and Ispat Industries among others have said they are interested.

    China's $3 billion investment to develop the Aynak copper mines in Afghanistan has spurred India to leverage its political goodwill in the country for resources. The interest sharpened after reports that Afghanistan is sitting atop a veritable treasure trove of minerals and metals. Afghan officials have told the Indians that they wanted to diversify their stakeholders from China -- in the present instance only one Chinese company has been invited to bid for the Hagijak mine.

    The initial bids for Hagijak were cancelled, sources said, after the Afghan government said they suspected bribes had been paid. But none of this was confirmed.

    A statement by the Afghan mines minister, Wahidullah Shahrani, said, "The development of Hajigak will involve major infrastructure improvements and will stimulate the local economy and improve and lives of the citizens of Bamiyan province and beyond.
     
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  3. Tshering22

    Tshering22 Sikkimese Saber Senior Member

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    The map says it all. Pakistan NO CHANCE. Iran's Chahbahar port: the shortest alternative. Iran may not be our best bet but they are cordial enough to allow a transit after all this trade we have with them. We need to use the Zaranj-Delaram highway straight in Iran and then use the Persian Gulf straight to Porbandar in Gujarat.
     
  4. JayATL

    JayATL Senior Member Senior Member

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    If Pakistan blocks it- India should block the Indus water treaty. I think it up for renewal? which would spell famine for Pakistan as it relies completely on the waters from the great Indian lands! Pakistan being an heavy agricultural state , it would be devastating. that is biggest threat to Pakistan.
     
  5. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Afghanistan is an independent country, how will Pakistan block it?? They are not in the equation if we use the Iranian port. Indian Govt has stopped never used this point as leverage or even before they could Pak has threatened a nuclear attack if India were to do this.
     
  6. JayATL

    JayATL Senior Member Senior Member

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    I was being a little exaggerated in my ' block it" call earlier.:) its up for renewal ( I think)and they are always looking for slightly better terms .

    Route through Pakistan would be more cost effective but Iran I guess would be more stable. I figure India can use the Indus treaty leverage if it wants Pakistan to comply .
     
  7. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    If we held onto what is now POK this issue would not exist.
     
  8. JayATL

    JayATL Senior Member Senior Member

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    Interesting- what would it have meant in terms of terrorism from Afghanistan- does it provide a buffer of sorts now?
     
  9. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    it brings jobs,foreign exchange,investment,development and possibly more future projects.
     

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