A strategic tilt in a positive direction, with a viable regional impact, is likely in Indo-Afghan ties if India wins the bid to commence iron ore mining operations in Afghanistan, well-placed sources here said.

International bids will be opened in the first week of October for mining rights of the Haji Gak iron ore deposits in Afghanistan’s Bamiyan province. With anticipated reserves of two billion metric tonnes, Haji Gak represents the world’s richest iron ore reserve, with an anticipated ore content of 62 per cent.

A public-private Indian consortium led by the Steel Authority of India, and comprising National Mineral Development Corp, Rashtriya Ispat Nigam Ltd, Tata Steel and two Jindal group entities is in contention. Abhijit Industries, a Kolkata company, is also in the fray. The Iranians are in the field.

Interestingly, however, the Chinese are not. In 2009, they won the mining rights for copper at Ainak in Logar province, south of Kabul, till then thought to be the world’s largest copper reserve. The copper deposits in Balkhab district of Sarai Pul province in northern Afghanistan are also expected to come under the hammer soon. These are expected to overshadow Ainak in expected tonnage.

The iron ore, copper and coal mines at Darai Suf between Bamiyan and Samangan, and gas reserves in the Balkh area, together offer upward of $300 billion in exploitable resources. Sources here believe India has a strong case for the Haji Gak bid.

India will gain from Afghan mineral deal

Knowledgeable sources here believe India has a strong case for the Haji Gak bid. If it wins the deal, Sail proposes an integrated steel plant with coal from Darai Suf, which is not too distant.

Speaking to this correspondent here last year, Afghanistan’s minister for mines Wahidullah Shahrani, who also coordinates Afghanistan’s infrastructure hub, had expressed worries on account of how India proposed to take out the minerals, given its relations with Pakistan and the US frowning on economic activities involving Iran. Ways are now available round that anticipated difficulty, Indian sources point out.

The proposed Chinese railway link between Ainak and Balkh in the north can be joined with a relatively short-stretch railway that India is ready to construct between Haji Gak and the nearest point on the Chinese-built railway. This opens potential evacuation of the iron ore through Uzbekistan. A slurry pipeline out of Afghanistan is also technically conceivable in the event that the ore content is not as high as imagined.

This would require substantial amounts of water, which is available in the area. The Chinese are planning a second railway track connecting Ainak with the Torkham border post with Pakistan, not far from Jalalabad in eastern Afghanistan.

Afghanistan has recently signed a oneway transit treaty for its goods through Pakistan. If Pakistan wishes to earn revenues from transit duties for the iron ore in the event of India bagging the Haji Gak project, it will be setting an excellent example for regional cooperation. India is understood to be prepared to approach Islamabad in this connection.

A recent meeting of the trade ministers of the two countries is seen as a good augury, although any realisation of potential can be said to be a good way off.