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 An Ariana Media Publication 04/20/2014
 India Consortium Bids for Afghan Deposits

The Wall Street Journal
08/07/2012
By Prasenjit Bhattacharya

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NEW DELHI--A consortium of six Indian companies has submitted bids to acquire copper and gold deposits in Afghanistan, the head of one of the companies said Tuesday, as global interest heightens in the war-torn South Asian nation's significant mineral deposits.

"We submitted the bids on Monday," Hindustan Copper Ltd. Chairman Shakeel Ahmed said.

It is a global tender and the Afghan government hasn't indicated any date for giving the contracts, Mr. Ahmed said. "The competition for these assets is expected to be quite tough."

Afghanistan's Ministry of Mines had in late June said companies from the U.S., Canada, the U.K., the United Arab Emirates, Turkey and Australia had also expressed interest in the projects.

The Indian consortium includes four state-run companies--Hindustan Copper, Steel Authority of India Ltd., National Aluminum Co. and Mineral Exploration Corp--and Monnet Ispat & Energy Ltd. and Jindal Steel & Power Ltd. from the private sector.

It is bidding for four mining projects in the provinces of Ghazni, Badakhshan, Herat and Sar-e Pol.

Monnet Ispat Managing Director Sandeep Jajodia confirmed submission of the bids. Executives at other companies and Afghan officials couldn't be contacted immediately for comments.

Resources rich Afghanistan has been scouring the globe for investors as it is looking for ways to gradually reduce its dependence on foreign assistance.

China made the first big-ticket bet on Afghan mines, winning a $3 billion project to develop the Mes Aynak copper mine southeast of Kabul in 2007. Analysts expect production in Mes Aynak to begin in 2014.

For India, there is more to its commercial drive in Afghanistan than a desire to seek out economic opportunities. Promoting Indian business in Afghanistan can be seen as part of a softer push to expand its influence in the country, something the U.S. has also encouraged New Delhi to do.

India sees this largely as a way of balancing Pakistan's ambitions and the Taliban in Afghanistan. Since the fall of the Taliban government in 2002, India has pumped in a few billion dollars for construction of highways, roads, power plants and even the country's parliament building.

Mr. Ahmed, however, said this is a pure business decision for the six companies. "Any exploration is risky by nature," he added.

Indian metals companies are looking for mines abroad as getting leases for mining at home takes several years because of lengthy regulatory procedures and litigations that such projects often get caught in.

Initially, the four state-run Indian companies were planning to submit their own bids without any co-ordination with the private-sector steelmaker. But they later decided to include Monnet Ispat and Jindal Steel.

"It was felt that two separate bids from India could lower the chance of winning," Mr. Ahmed said. "So, it's best to give a combined bid."

It is likely the Indian government prevailed on the companies to get together for bidding, as a previous bid by a consortium of state-run and private-sector firms had won the rights to mine iron ore in Hajigak province, one of the world's richest deposits.

Investing in Afghanistan isn't a standalone private-sector activity, as support from the Indian government is required to help the companies get necessary approvals for mining and access to adequate security.

Write to Prasenjit Bhattacharya at prasenjit.bhattacharya@dowjones.com

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