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Afghanistan paves way for mining

KABUL, Afghanistan, Dec. 19 (UPI) -- Afghanistan has indicated it is seeking Australia's involvement in tapping into the Asian country's massive mining potential.

In an interview with the Australian Broadcasting Corporation, Afghanistan's ambassador to Australia Nasir Andisha said he's planning exploratory meetings to check "if there is a possibility of getting major companies interested," mentioning Australian mining giants BHP Billiton, Rio Tinto and "others."

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That follows advertising placed by the Islamic Republic of Afghanistan in major Australian newspapers earlier this month for "expressions of interest" as Kabul formerly opened a tender process for four large copper and gold concessions.

U.S. defense officials estimated in 2010 that there could be as much as $1 trillion worth of iron, copper, cobalt, gold and lithium in Afghanistan.

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Afghan President Hamid Karzi, speaking this month at an international conference in Germany regarding the future of Afghanistan, said his government is working hard to exploit its mineral resources for "long-term growth and prosperity."

Afghanistan Minister of Mines Wahidullah Shahrani predicts that mining would account for 25 percent of Afghanistan's gross domestic product by 2016 and 45 percent by 2024.

Downplaying concerns of violence in the country, Shahrani told The Australian newspaper, "Most of these deposits are located in relatively secure areas of the country, and Afghanistan has committed to provide the necessary security."

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He added that the tender process would be carried out in a "very clean and transparent way."

Also up for tender, says Shahrani: "a huge oil basin" in March 2012 followed by "a big gas field on the border of Turkmenistan" and "another huge iron ore deposit" near Hajigak, the Financial Times reports.

"These tenders will help us move forward toward self-sufficiency," the minister said. "We know what the contribution of oil, gas, and minerals should be to our GDP, given that we are a country heavily dependent on international aid, which is not sustainable."

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Last month, a consortium of Indian mining companies secured rights to Afghanistan's massive Hajigak iron ore deposit and in 2007 state-backed Chinese Metallurgical Group Corp. won the rights to one of the largest copper deposits, at Mes Aynak, near Kabul.

Even at this early stage, Kabul's manner of awarding mining rights is being questioned.

Alexander Benard, managing director of Washington investment advisory firm Gryphon Capital Partners, said that China had been well positioned to win the Mes Aynak tender because with state backing it could offer much higher mining royalties.

But Andisha, the Afghan ambassador, maintains that Kabul has "a policy of balance" and aims to attract investors from all over the world.

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