Economy, Domestic Economy

Ambitious Mining Deal With Afghanistan

Ambitious Mining Deal With Afghanistan
Ambitious Mining Deal With Afghanistan

Iran has signed an agreement with Afghanistan on exploration and exploitation of mines and mineral exports.

The agreement was signed between Iran’s Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh and the eastern neighbor’s Minister of Mines and Petroleum Daud Shah Saba in Afghanistan’s capital Kabul on Wednesday.

Shah Saba, who met with the industries minister during the inauguration of Iran’s 3rd exclusive exhibition in the Afghan capital, said the agreement will help expand Tehran-Kabul economic ties and pave the way for the two countries’ private sectors to invest in mining projects, IRNA reported.

He added that Iran has gained “valuable experiences” in the mining sector in the past few decades and Afghanistan aims to use that experience to further develop its mines and mineral industries.

The Iranian official described the future of Afghanistan’s mining sector as “promising” and said Tehran will not only cooperate with Kabul in mineral exploration, extraction and exports, but would also provide the country with the required mining equipment and machinery.

Nematzadeh added that Iran prioritizes mines near its border, such as the Hajigak Iron Ore Mine located in northwestern Afghanistan.

It is the best known and largest iron ore deposit in Afghanistan.

Furthermore, Iranian Mines and Mining Industries Development and Renovation Organization, in cooperation with an Iranian private company, is set to establish a cement factory in Afghanistan with Afghan economic players undertaking the project investment.

Later in the day, the industries minister also met with Afghan Minister of Commerce and Industries Homayun Rasa and discussed the formation of a joint trade committee with the inclusion of deputies of the two countries’ ministries to address transit restrictions hindering bilateral trade and customs tariffs.

“We want Iranian production lines to start activity in our country,” said Rasa, adding that export tariffs of Afghan goods need to be reduced and transit obstacles removed to facilitate trade and motivate economic players for business.

Nematzadeh said Iran is prepared to share its experiences in setting up industrial parks and creating jobs, while removing difficulties in transportation, customs procedures and bank operations.

Afghanistan is home to over 1,400 mineral fields containing copper, gold, iron ore, lead, sulfur, zinc and high-quality gemstones such as emerald, lapis lazuli, red garnet and ruby.

The country holds $1 trillion in untapped mineral deposits, according to USGS reports.

Hajigak Iron Ore Mine is estimated to possess nearly 2 million tons of approximately 62% pure iron ore, with 16 ore bodies extending for up to 3 kilometers. The mine is amenable to open pitting, with the added bonus provided by the nearby Shabashak Coal Mine for the establishment of an integrated iron and steel plant.

Afghanistan is also home to one of the world’s largest copper reserves. Mes Aynak Copper Mine–located in the Afghan Logar Province–is the world’s second largest copper reserve. The Afghan Mining Ministry estimates that the mine holds some 6 million tons of copper. The mine is expected to be worth tens of billions of dollars.