Afghan mines remain a no-entry zone for India Inc

The US may be excited about the $1-trillion mineral deposit find in Afghanistan, but there are hardly any takers from India for the 1.8-billion-tonne Hajigak iron ore deposit, a part of the larger pie.

A little over a year before, when the Hajigak iron ore deposit was put up for grabs, at least five companies - Essar Minerals, JSW Steel, Rashtriya Ispat Nigam (RINL), Sesa Goa and Ispat Industries - had evinced interest. Now, even after the much-publicised US discovery, the deposit seems to have inspired little interest, even as it goes for re-bidding.

"Can I ask any one to go and work in Afghanistan?" asked a top official at the country's largest iron ore producer, NMDC. The state-owned company, scouting for resources across the globe, was never in the fray.

That's the question on the top of every one's mind. It's not the poor infrastructure or lack of corridors in the land-locked country that is deterring investors, it's the obvious: Security concerns.

Touted by the government as the "best known iron-oxide deposit in Afghanistan", the tender was scrapped in February this year after it failed to make any headway.

The deposit extends over 32 km and contains 16 separate zones, seven of which have been studied in detail. The ore contains about 62 per cent iron and should be lucrative, otherwise.

"We had raised a host of issues last year. How are we supposed to carry out due diligence if it's Taliban-infested," said Anil Sureka, director-finance, Ispat Industries.

Essar Minerals is not likely to participate when the deposit goes for re-bidding, while RINL will re-evaluate. "We have to re-assess in the light of conditions prevailing," said RINL's chairman and managing director, P K Bishnoi.

"We had just asked for some data. The interactions never went beyond that," said P K Mukherjee, managing director, Sesa Goa.

The Afghan mining ministry is planning an international roadshow for the Hajigak soon, but could be in for a rude shock. India's mine minister and his Afghan counterpart recently discussed these issues. After all, India is contributing significantly to the reconstruction of war-struck Afghanistan.

There is a second glitch. Most resources are closer to the Pakistan border, spelling all-round trouble for India.

Last time, the process was abandoned citing lack of stability in the market. It's unlikely there would be over-enthusiasm on the back of just a spiraling resources market. Whether the ancient land of lapis lazuli can shed the baggage of a nine-year conflict and transcend to more basic materials like iron ore, copper, cobalt, lithium, Hajigak will tell.