KOLKATA (miningweekly.com) – The Indian government, at the behest of its External Affairs Ministry and the National Security Advisor, has directed government-owned mining and metal companies to collaborate with private companies in putting in a single consolidated bid for copper and gold projects in Afghanistan.
At a review meeting on Indian investments in Afghanistan, held under the aegis of the Prime Minister’s Office last month, representatives from the Ministry of External Affairs and the National Security Advisor advocated that a single bid by Indian private and government companies would be more effective in competing with the mining interest of China in that country.
Indian Foreign Secretary Ranjan Mathai and Indian ambassador to Afghanistan, Gautam Mukherjee, provided critical inputs during the review meeting, as the Ministry of External Affairs guided Indian investment proposals in the Afghan mining and mineral sector as part of bilateral engagements in extending the India-Afghanistan strategic relationship, an official in the Ministry of Mines said.
The Afghan government has short-listed a consortium of Hindustan Copper Limited (HCL) and National Aluminium Company Limited (Nalco), both government-controlled integrated metal producers, for the development of the Badakhshan copper reserves, Zarkashan copper and gold reserves and the Shaida copper reserves, which were put up for competitive bidding. The bid tenders were floated in December 2011 and closed in March 2012.
According to information with the Indian Mines Ministry, 25 companies from countries like China, the US, the UK, Turkey, the United Arab Emirates, Canada and Australia, featured on the shortlist.
Indian private companies, Monnet Ispat & Energy and Jindal Steel & Power, have also put in a separate bid as another consortium for the copper and gold mining projects up for bids, an official in the Mines Ministry said.
Following the government directive for a single, consolidated bid for mining projects in Afghanistan, the Nalco-HCL consortium combination would soon initiate consultations with Monnet Ispat and Jindal Steel to merge the consortiums and combine the bids, a Nalco official confirmed.
A single, consolidated Indian bid for the copper and gold projects would enable the Indian government to offer strategic diplomatic support to the proposed investments and successfully compete with aggressive expansion by Chinese companies. Moreover, a single bid would facilitate the Indian government considering offering sovereign guarantees to facilitate in raising funds through debt and equity from global financial institutions, the Mines Ministry official said.
Last year, Afghan Iron and Steel Company Limited (Afisco), a consortium led by Steel Authority of India, the country’s largest integrated steel producer, won the rights to develop a 1.8-billion-ton iron-ore reserve in Hajigak province in Afghanistan. Afisco planned investment was to the tune of $11-billion for development of the reserves, a steel production unit, associated logistics and infrastructure necessary for evacuation of ore and transportation of finished steel.