Consortium Wins Gold and Copper Mining Permits in Afghanistan

on Dec 7, 2012

**Joint Venture Pushes Towards Resource-Rich Afghanistan**

Afghan Gold and Minerals, a consortium backed by prominent businessmen including former JP Morgan rainmaker Ian Hannam, Poland’s richest man Jan Kulczyk and Afghan mine owner Sadat Naderi, has emerged as a winner in the latest licensing round for Afghan mining permits, The Financial Times reported on 6 December 2012.
The consortium has been named preferred bidder for one of the three gold and copper exploration licences opened for tender last year by the war-torn country’s government — the Balkhab copper exploration licence northwest of Afghanistan’s capital Kabul. Another joint venture which has been declared preferred bidder for the Badakhshan gold concession in the Afghan licensing round is Turkish-Afghan Mining Company (TAMC), in which Afghan Gold and Minerals holds a 49 per cent stake.

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According to Mr Naderi, Afghan Gold and Minerals has already won an Afghan gold mining licence which is close to production. The consortium has been created by the local businessman, who owns 51 per cent of it, and Mr Hannam’s investment group – Centar, in which Poland’s wealthiest man Mr Kulczyk owns a 28 per cent share. The joint venture has been launched with the aim to target resource-rich Afghanistan, which situated on the Tethyan Eurasian mineral belt, represents a huge, untapped mining opportunity.

**“Second Wave” of Afghan Mining Licensing**
On Thursday, Afghanistan’s ministry of mines granted another tender for Shaida copper exploration in the Herat province to Afghan Minerals Group. The country’s minister of mines Wahidullah Shahrani said that Afghan Gold and Minerals, TAMC and Afghan Minerals Group had been picked from a shortlist of 25 bidders to explore and begin to develop the Balkhab, Badakhshan and Shaida projects, respectively. He said: “We look forward to finalising mining agreements with them.”

!m[Afghan Gold and Minerals Wins Latest Licensing Round for Mining Permits in War-Torn Country](/uploads/story/988/thumbs/pic1_inline.png)The announcement followed the ministry’s confirmation that it had also granted rights for oil and gas exploration in the Afghan-Tajik basin of northern Afghanistan to a consortium made up of energy gas companies Dragon Oil (LON:DGO), Turkey’s TPAO, Kuwait Energy and local partner Ghazanfar.

The current tendering round represented the “second wave” of mineral mining licensing by the Afghan government. In 2008, Metallurgical Corp of China (HKG:1618) was granted a licence to the Aynak copper deposit, while last year the Afghan government gave an Indian steel company the right to exploit the country’s Hajigak iron ore deposit.
**Slow Progress in War-Torn Country**
Mr Naderi said that early production at Afghan Gold and Minerals’ copper licence could begin as soon as late 2014, depending on an assessment of copper reserves. He added that the inclusion of well-known western financiers was a key factor in winning the concession as development costs for the project could run at up to $1 billion.
The Financial Times quoted Mr Naderi as saying: “We want to get things moving quickly. Getting from exploration into production is good for our shareholders and for the Afghan government.”
Yet the Afghan businessman is concerned that slow progress had been made on previous mining licence awards in the war-torn country, where attacks on the Aynak site southeast of Kabul recently prompted the temporary evacuation of Chinese workers. According to him, a more settled security situation in northern Afghanistan, combined with access to capital, could allow rapid progress on its licences.


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