India looking closely at Afghan minerals

As Afghanistan begins to invite suitors for its mineral assets, India is already considering teaming up with China to make the most of the offer

MUMBAI -  - 

It is an open invitation. With the Afghan government moving ahead to tap the nearly $1 trillion worth of mineral resources of iron, gold, copper and cobalt that exist in the country, Indian companies have been invited to join in. While this is expected to enhance and diversify trade ties between the two nations, many Indian corporates are gung-ho that their operations will succeed in Afghanistan, despite the security problems posed by the Taliban.
On Monday, July 19, Afghan minister for minerals, Wahidullah Shahrani, met visiting external affairs minister, S M Krishna, and extended the invitation and Indian companies have been clamouring for a toe-hold in the region.
ArcelorMittal has already held roadshows in Afghanistan. The National Aluminium Company (NALCO), Vedanta Resources, Essar and Hindustan Copper have also lined up to explore Afghan's mining assets.
The Afghan find had sparked off a huge debate in the mining industry. According to a news report, iron is said to account for almost half of the total value of minerals found in Afghanistan, with copper coming in second. The large gold deposits are said to be in the Pashtun areas of southern Afghanistan. The discovery of lithium in this bag of traditional metals has raised a few eyebrows, because of its modern-day use in cellphone batteries and `green vehicle' cells.
Incidentally, a similar invitation had been extended earlier by Shahrani, following his visit to India and his meeting with the Indian counterpart, B K Handique. After the meet, Handique told reporters: ``Everybody is now talking of the potential in Afghanistan. We are also equally keen to tap that opportunity. And India is a natural partner for them.''
Currently, India is the fifth-largest donor to Afghanistan. Indian firms have already been working in Afghanistan and are helping in various sectors encompassing urgent human needs - like construction of roads, dams, schools and hospitals, power transmission lines and even tube-wells. Recently, the Indian government awarded a $250 million contract for constructing the Afghan parliament building to two Indian firms.
India is also looking at the just-inked Afghan-Pakistan trade agreement which is expected to make it easier for Indian companies to export the minerals to India via road. If there are any hurdles, India has also built a road from Nimroz province in Afghanistan to the Chabahar Port on the coast of Iranian Sistan-Baluchestan, as part of its efforts to reduce Afghan dependence on supply routes through Pakistan.
The Indian government is keen to ensure smooth relations with neighbouring countries. As part of its efforts to broaden its base of relations, India is also contemplating teaming up with China and entering into joint initiatives in Afghanistan, to tap the mineral resources. Booming trade between the two countries is expected to touch a new of high of $60 billion this year.
Not to be outdone, Iran's minister of economic affairs and finance, Seyed Shamseddin Hosseini, who called on the Indian Prime Minister Manmohan Singh earlier this month, has agreed to step up the pace of work at the Chabahhar port.

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