Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
As the United States and its allies look back on a weekend of memorials and tributes to the nearly 3,000 victims of 9/11, the country that was struck in retaliation for the 2001 attack on America could become a hotbed of mining.
The National reports that Indian firms are bidding billions of dollars for a contract to mine iron ore in a central district of Afghanistan:
“A consortium led by the state-run Steel Authority of India (SAIL) could invest up to US$6 billion (Dh22bn) in the mine, railroads and a steel plant in a race with China to lock in raw materials for two of the world’s fastest-growing economies.”
The Hajigak iron ore deposit is being touted by the Afghans as the world’s largest deposit with 1.8bn tonnes of iron ore. But this figure is at best an estimate and comes from Soviet scientists in the 1960s, FT beyondbrics blog reported back in July.
An Indian diplomat quoted in The National story says commercial production is 10 years away.
While concerns over security and the strong possibility that minesites could become a terrorism target have dissuaded mega-miners like Rio Tinto and BHP Billiton from investing in Afghanistan, Indian and Chinese companies have shown an interest in the war-ravaged country.
Last week China National Petroleum Corp. (CNPC) won a bid for an oil field in northern Afghanistan in the first contract for international oil production signed by the Afghan government for several decades, Reuters reported. That is in addition to a contract won in 2007 by Jiangxi Copper Co., China’s biggest copper producer, and China Metallurgical Group to develop the Aynak Copper Mine south of Kabul — due to start producing in 2014.
According to some calculations Afghanistan’s resource sector could be worth some $3 trillion.
