Massive Afghan iron ore deposit up for tender again

Sat Sep 25, 2010 2:31pm EDT
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By Emma Graham-Harrison

HAJIGAK, Afghanistan (Reuters) - Afghanistan put its Hajigak iron ore deposit back up for tender on Saturday, after taking it off the market last year, promising security for investors despite a worsening insurgency.

Afghan Mines Minister Wahidullah Shahrani said he hoped production would start by 2014 on what he said was a huge, high-quality ore vein, that offered investors a rare opportunity with reserves estimated to be worth as much as $350 billion.

Security is likely to be the main concern to potential investors when Shahrani meets them at a conference in New York on September 29, with the insurgency at its most violent since the 2001 overthrow of the Taliban government.

The Hajigak deposit straddles Bamiyan, Parwan and Wardak provinces, with only Bamiyan relatively peaceful.

Shahrani said that the Aynak copper mine south of the capital, developed by Chinese firms since 2008 and worth about $43 billion, proved Afghanistan could protect important assets.

The government has a specially trained force to protect mines and other infrastructure, with many of its members drawn from villages surrounding the asset under guard.

"The community has been taking care of the Aynak deposit, even though that is in a very insecure part of the country ... in the last two years there has not been a single incident," Shahrani told reporters visiting the mountainous region to the west of Kabul where the Hajigak deposit lies.