Thursday, November 22

Chinese Firm in Afghan mining initiative

Now this is very curious indeed. This will indeed set a smallish cat amongst the geopolitical pigeons, specially after the Chinese oil investments in the Central Asian Republics, the Shanghai Cooperation Council and now this. I quote:

A state-owned Chinese company has won the right to develop a large copper deposit in Afghanistan after agreeing to invest $3bn (€2.02bn, £1.45bn) in the project, the Afghan mines minister yesterday announced .
The deal is the largest foreign investment in Afghanistan's history and will give China Metallurgical Group (MCC) the right to extract high-quality copper from the Aynak copper field near Kabul.

The company will pay the Afghan government $400m a year to exploit what some geologists think could be the world's biggest copper deposit.
"This is the biggest investment in Afghanistan's history and 10,000 people will be employed to work there," said Ibrahim Adel, Afghanistan's mines minister.
"We estimate there are 13m tonnes of copper present," said Mr Adel. The minister said that figure might rise to 20m tonnes. At today's prices the value of the copper would be $30bn, according to some estimates.

Years of war in Afghanistan have ensured that the deposit has remained largely untouched since Soviet geologists surveyed the field in 1979.
Enormous obstacles need to be overcome before the site, which lacks either power or transport links, can be properly exploited.
MCC will first have to build a power station to run power to the mine and find coal deposits to fuel the power station. Excess electricity from the station will power Kabul, which, at present, enjoys only a few hours of electricity a day.
The Chinese offer beat four other shortlisted bids -Strikeforce, part of Russia's Basic Element Group, the London-based Kazakhmys Consortium, Hunter Dickinson of Canada and US copper mining firm, Phelps Dodge. The $3bn bid surprised some analysts in Kabul who were expecting the tender to go for less than $2bn.
The high-profile Aynak deal has been seen as a litmus test of how the country deals with the international mining industry. Concerns were raised by the World Bank about the bidding process, which had been ongoing for more than two years. Yesterday, the bank said it was broadly happy with the way the process had been conducted.
MCC is one of the largest state-owned companies in China, with activities ranging from engineering and property to pulp and paper and mining.
The group, which made net profits of more than Rmb3bn ($404m, £196m, €273m) in 2006, says it has invested $1bn in overseas mining operations in countries including Brazil and Pakistan and in resources ranging from iron ore and copper to gold and nickel. Its largest division is in equipment manufacturing, where it is one of the world leaders in manufacturing machinery for steel plants.
According to reports in the Chinese media, MCC bid for the contract in Afghanistan in collaboration with two other Chinese mining groups, Jiangxi Copper, the biggest copper producer in the country, and Zijin Mining Group, China's leading gold mining company.

All this to be taken with a grain of piquant salt!!!

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