China Wins Right to Explore Afghan Copper Mine

The copper mine which is possibly the world's largest

Afghanistan has chosen a Chinese bidder to lease a copper mine which is possibly the world's largest, in a contract that is set to bring in hundreds of millions of dollars, the mines ministry said Nov. 20. The 30-year lease has been offered to China Metallurgical Group Corporation (MCC) to develop the Aynak mine 30, 20 miles east of Kabul, a Afghan mines ministry spokesman said.

China's commerce ministry said that MCC, a state-owned metal producer and contractor, and Jiangxi Copper Co. would jointly develop the mine.MCC, expected to sign a deal in the coming months, is to invest around three billion dollars to explore and develop the mine, which will also provide jobs for thousands of Afghans, Afghan ministry spokesman Kozhman Ulomi said. "So far in our history there hasn't been any contract of this scale," he said.

The Chinese offer beat bids by Strikeforce, part of Russia's Basic Element Group; the London-based Kazakhmys Consortium; Hunter Dickinson of Canada; and U.S. copper mining firm Phelps Dodge.

The government would also earn millions of dollars in taxation and take a cut, possibly worth up to $200 million a year depending on the price of copper, of the annual worth of production.

In terms of the deal, the company is expected to build a coal-fired power station with 400 megawatt capacity, half of which would be for the use of families in Logar province where the mine is located, he said.

Afghanistan currently produces only 150 megawatts from its main source of electricity, hydropower, due to a general water shortage. The company also said it would build a railway line from the town of Hairatan on the Amu Darya (Oxys River) bordering Uzbekistan, through Logar and to Torkham on the Pakistan border to export the minerals, the official said. It added that it would construct a town near the mine for 1,500 families. Other spinoffs would include extra demand for Afghan coal and the creation of small industries using other metal taken from the mine, he said.

First discovered in 1974, the mine is estimated to contain 11.3 million tons of copper. About 200,000 tons could be extracted a year, Ulomi said.

Copyright Agence France-Presse, 2007

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