Mining ore is fine in Afghanistan,but not making steel: NMDC

“NMDC should continue to show interest in participating in the development of the Hajigak deposit through the bidding process and it should simultaneously strive for acquisition through the government allocation route,” the report said. In pre-tour talks with Afghan mines minister Wahidullah Shahrani,the company pressed for direct direct allocation of exploratory licence to NMDC on a government-to-government allocation basis,but the Afghan side indicated that it could do so only if the Indian government asked for it.

On the issue of setting up a steel plant,the team recommended that in view of the “high capital costs involved in setting up a steel plant and the presence of low cost integrated steel producers in neighbouring countries like Kazakhstan,Ukraine and Russia,setting up such a plant could amount to blocking of NMDC’s capital.” Interestingly,state-owned steel giant SAIL is interested in setting up a steel plant there for value addition and is understood to have accordingly briefed its administrative ministry.

The Afghan investment laws too seem to be investor-friendly as they allow 100 per cent foreign ownership,100 per cent capital repatriation with no restriction on capital. The Karzai government has levied a flat 20 per cent corporate tax and 1 per cent duty on raw materials and there is no duty on imports of new machinery. According to the bidding process,the Hajigak deposit has been split into four blocks. If a company wins more than one block,one contract for all winning blocks will be considered. The mining lease to be granted are likely for a 30-year period.

During the talks,Shahrani and his team also sought NMDC’s expertise in mining coal from the Dari Suf mine,located about 100 km from Hajigak. On the issue of evacuation infrastructure,which is considered to be poor there,the Afghan officials said the Karzai government was interested in setting up a railway corridor in the Northern part of Afghanistan in two phases. One would be from Turkham (on Pak-Afghan border) to Mazaar-e-Sharief and the other one connecting Hajigak to the Iran border for their onward shipment through the Iranian Chahbar port to other markets.

To ensure security for the proposed project,the Afghan officers said,“… the Afghan government was willing to spend $10 million for setting up security check posts and for recruitment of trained police personnel.”

Mine Business

* The Hajigak deposit has been split into four blocks. If a company wins more than one block,one contract for all winning blocks will be considered

* The mining lease to be granted are likely for a 30-year period

* Afghanistan has levied a flat 20% corporate tax and 1% duty on raw materials and there is no duty on imports of new machinery

* To ensure security for the proposed project,the Afghan officers are open to providing trained Mining Police for Hajigak