Mineral Resources of Afghanistan Driver for ... - Ministry of Mines

AFGHANISTAN
MINISTRY OF MINES
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Mineral Resources of Afghanistan
Driver for Regional Economic Development
Wahidullah Shahrani
Afghan Minister of Mines
http://www.mom.gov.af
London, 30 June 2011

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Geology and Mineral Potential of Afghanistan
Indian Plate
Afghanistan has complex
geology
Northern part belongs to
Eurasia
The south is made up of
accreted fragments of
Gondwana Land
including the Indian and
African Plates
Each block is separated
by deep seated faults
There were different
geological activity in
each zone which resulted
in formation of very rich
mineral assemblages
Resources are estimated
at USD 3 trillion

Potential for Metals
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Iron ore deposits occur along
a line from Afghan-Tajik
border to Afghan-Iranian
border, extends several
hundred km. Resources are
estimated at billions of tons
of high quality iron
containing a very attractive
mixture of elements, Mo, Ti,
and V.
Copper deposits (all three
kinds such as sedimentary,
porphyry and VMS) are
significant in different parts
of the country and the
estimated resources are
around 70 million tons.
I
r
a
n

REE,Ta,Nb, Li, Be, and Gemstones
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Tin, Tungsten
Pegmatites
Be, Li, Ta, Nb, Gems
REE, Nb in carbonatites

Oil and Gas Resources
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Three proven basins
Afghan-Tajik Basin
Amu Darya Basin
Herat Basin
Afghan Tajik
Two other potential basins
Katawaz Basin
Helmand Basin
Most of these basins are filled
with several km of sediments,
an ideal geological setting for
hydrocarbon generation

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Northern Hydrocarbon Basins

USGS and AGS Assessments
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Recent estimates of the oil resources
have increased by more than 40 times
and that of the natural gas resources by
three times than what the Soviet data
had indicated
Undiscovered gas reserves are
estimated at 15.7 trillion cf
Undiscovered oil reserves are estimated
at 3.56 bbls
Undiscovered liquid gas condensate
reserves are estimated at 1.33 billion
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15
12
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6
3
Gas
Oil
barrels 0
Gas
Oil

Existing Major Projects
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Supervision of World class Aynak Copper Mining Contract, capital
expenditure, $5 billion, 35 km South-East of Kabul. Production will
start in 3 years. The project will bring hundreds of millions of dollars
annually to the state treasury
World class Hajigak Iron $340 billion In Situ gross value, 20,000 jobs,
130 km west of Kabul. Tendering is in progress. There are several
additional prospects close to Hajigak that will extend the life and
quantity of production
Two gold projects such as Noraba-Samti and Qara Zaghan
Amu Darya Oil Basin is going to be awarded in late July of 2011 and
gas development in Northern Afghanistan is going to be started in
September of 2011.
Cement in Jabal-Seraj, Herat and Samangan
Chromite in the South-East
Gemstones in the North-East

Large Mining Projects Require
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Railroad and highways for export of
ore, ore concentrate or final metal
products (copper, steel,
construction materials, and import
of machinery and equipment)
Access roads
Power supply (hydro, coal fired, or
gas fired)
Water supply (for industrial and
domestic needs)
Community development projects:
clinics, schools, local transportation
and drinking water supply, etc

MAJOR ROAD DEVELOPMENTS
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Completed
Major Roads
Planned
Road
Construction
Ongoing
Road
Construction
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MAJOR RAIL DEVELOPMENTS
Existing Rail
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Proposed Rail (Asian
Development Bank)
Proposed Rail
(Aynak)
Aynak Copper
Hajigak
Iron Ore
Proposed Rail to Gawadar Port
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National & Regional Resource Corridors
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Shiberghan
Gas
Herat
Production, Trade
and Mining
Mazar-i-Sharif
Trade, Production & Mining
Balkhab Copper Mine
Kunduz
Production,
Trade &
Mining
Ministry of Mines
Existing
Railroads
Planned Railroads
(Asian Development
Bank)
Planned Railroads
(Aynak)
Jalalabad
Production, Trade and
Mining
Feasibility Study is
Required
Railroad that is going to be
studied
Bamyan
Hajigak
Iron Ore
Kandahar
Production & Trade
Logar – Kabul
Aynak Copper
Katawaz
Mining

REGIONAL RAIL NETWORKS
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Afghanistan Energy Infrastructure
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TAPI

Prospective Tenders in Near Future …
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Shaida
Copper
Zarkashan
Gold &
Copper
Badakhshan
Gold

Prospective Tenders in Near Future
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Balkhab
Copper
Sayadara
Iron ore
Afghan-Tajik and Western
Afghan-Tajik Oil basins

Mineral and Hydrocarbons Bid Criteria
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Bids are evaluated based on:
– Technical capacity
– Financial strength
– Revenue to the government
– Level of socio-economic benefits to the
communities and the people
– Dimension of newly built infrastructures
– Environmental protection standards

Fiscal Regime ……
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Royalties & Taxes
According to the law,
companies that are engaged
in a mining contract with the
Government of Afghanistan,
pay the following:
Royalty from the gross
product
Surface usage fee
Corporate tax (20%)

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Mining companies will have
an unlimited loss carry
forward.
Capital allowances on a
straight-line basis over 5
years.
Fiscal stability for 8 years
Pre-production expenses are
capitalized and can be
recovered over 15 years or
the life of the mining license
Fiscal Regime

Legal Framework…..
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The Constitution and
the Minerals Law of
Afghanistan provide
the following:
Strongly advocates
market economy
The Government
guaranties that the
private investment is
not nationalized

Legal Framework
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Guarantee of tenure from
exploration to exploitation
Royalty regime in line with
international standards
Simplified licensing process
Guaranteed profit repatriation
Clear and transparent dispute
resolution mechanisms
Commitment to transparency in
awarding contracts (EITI)

Duration of Mining Contracts
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30 years for large
projects
Can be extended
every five years until
reserves completely
exhausted
10 years for small
mines
Can be extended
every five years

Ministry’s Vision
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Ministry’s Mission:
Generate Revenue
To be an enabler of the sector’s
development and steward of all
mineral resources through the
implementation of international best
practice policies, regulations and
procedures to encourage
environmentally and socially
acceptable private investment.
Attract Private Investment
Ensure security of supply
Efficient Administration
Create Jobs

MoM Business Plan
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2010 - 2015

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PHYSICAL SECURTY
Government is responsible for providing 100% of security
MINES PROTECTION UNIT
Currently in full operation at Aynak Copper (1500 Security
Personnel).
Government plans to expand the total number up to 7000
personnel in order to provide security to all mining projects in
future such as Hajigak Iron Ore, Amu Darya Oil Basin,
Shiberghan Gas fields and Badakhshan Gold etc.

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MINERALS SECTOR OPPORTUNITIES
The following are the prospect deposits which are going to be tendered
in future:
Northern Aynak copper (south of Kabul)
Sya Dara Iron Ore (Bamyan)
Balkhab Copper (Saripul province)
Shiberghan Gas (gas - fired power plant and gas distribution networks)
Shaida Copper (Herat province)
Badakhshan Gold
Zarkashan Gold & Copper (Ghanzi)
Cement plants in Herat, Mazar-i-Sharif, Takhar and Jabalseraj
Herat Lithium
Mazar- i- Sharif Oil Block (Western Afghan- Tajik Basin)
Tirpul Oil Basin (Herat)
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Why Invest in Afghanistan
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Afghanistan is the link between Central Asia and South Asia
• Potential growing market
• GDP growth in excess of 10% over the last five years
• Expected to grow 8-9% in future years
Close to the largest and fastest growing markets in the world
Comprehensive infrastructure development programme focused
on resource corridors
‘Mining Protection Unit’ established to guarantee security of
mining projects

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