Mineral investors likely to move from Afghanistan to Iran
- The growing security concerns in Afghanistan have pushed some Chinese and Indian companies to withdraw their mining investments from the country. This is increasing the chances that the investors might move to Iran’s mines, Eghtesad-News reported.
After the IS seized phosphate mines near the town of As-Sawwanah between Damascus and Palmyra in Syria last month, the extremist group’s affiliates in Afghanistan are also reportedly trying to finance their operations through the illegal exploitation of minerals there.
The IS group is a grave threat to the Afghan mining industry, as most of the country’s mineral resources are vulnerable to misuse by militants, media sources quoted Afghanistan’s Minister of Mines and Petroleum Daud Shah Saba as saying last week.
“The IS is the cause for insecurity; for example, we have 339 contracts but we cannot monitor over 100 of them due to security challenges,” Saba said.
Afghanistan, which is estimated to have $3 trillion in mineral deposits, is largely reliant on international aid. If foreign mining companies make the final decision to leave the war-ravaged country, the government would miss huge revenues from mineral extraction and exports.
Considering the similar characteristics of iron ore deposits in Afghanistan and those in Sangan region in the northeastern Khorasan Razavi Province of Iran, experts predict that the foreign mining companies would head to Iran upon their departure from Afghanistan.
Iran is also regarded as an important transit route for the export of Afghan minerals, since Afghanistan has no direct access to international waters.
During his April visit to Iran, Afghan President Ashraf Ghani called for enhanced mineral cooperation between the two countries.
Last month, India signed a memorandum of understanding with Iran to invest on the development of the southeastern Chabahar Port. The port will play a key role in India’s efforts to export minerals from Afghanistan, where it has already reachded an agreement to explore the prized Hajigak iron ore mines.
Experts believe security concerns in Afghanistan, availability of vast iron ore deposits in Iran’s eastern regions and well-developed transportation infrastructure in Iran could persuade the Chinese and Indian firms to shift their focus toward investing in Iran’s mining sector.
Publish date : Sunday 21 June 2015 22:27
Story Code: 25482
Source : Financial Tribune