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Afghanistan opens $1t mineral sector

16 Apr 2019 Afghanistan Times

AT Monitoring Desk

KABUL: Afghanistan launched 43 tenders for natural resource

projects as part of a global initiative to attract investment into its mineral

sector that has assets estimated to be worth $1 trillion.

Afghan Minister of Mines and Petroleum Nargis Nehan said 14

tenders would be opened for large-scale projects to international companies

through a competitive bidding process and the remaining small-scale projects

would be awarded to local companies.

Declaring that her country’s mining sector is ‘open for

business,’ Nehan said at the Afghanistan Mining Investment Forum in Dubai that

the projects have generated interest from the US, European, and Gulf companies.

In her keynote address at the forum convened by Invest, a

global initiative of the US Agency for International Development (USAID) to

mobilise private investment in partner countries, the minister said the new

large and small-scale mining projects available for private sector investment

and development span a number of commodities and are situated in 16 of the

country’s 34 provinces.

“For the first time ever, Afghanistan is opening

opportunities for international investors to bid on ruby, emerald and lapis

lazuli projects. Many of the commodities, such as marble, travertine and

cement, selected for tenders have strong domestic and regional market demand.

Others, such as gold, copper talc, iron ore, marble and oil and gas have

established international markets,” said Nehan.

She said the Afghan government has put in place a new

minerals law and transparent regulations and procedures for investors to take

advantage of the new opportunities.

After the tendering, an estimated $100 million will likely

be spent on initial assessments, exploration and evaluation work for these

projects over the next 12 months with investments increasing significantly in

following years as projects advance. Tenders will cover a wide range of

commodities including oil and gas, gemstones, copper, gold, marble, and talc, said


She said due to a previous investor-unfriendly Minerals Law,

there has been negligible mineral exploration in Afghanistan for the past

decade at a time when mining companies have spent, on average, more than $10

billion each year exploring for minerals worldwide.

The government hopes a royalty rate from 2.5 per cent to 7.5

per cent and an import duty exemption on machinery used to work on the projects

will encourage investment. The tenders cover projects in 16 of the country’s 34

provinces and the government.

A tender can be awarded within six months and work is

expected to start within a further six-month period, the minister said.

The government will invest in some tender-related

infrastructure but expects many companies will choose to do it themselves.

Security on the projects will only be provided by local forces, Nehan said.

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