Chinese To Mine Copper In Afghanistan

China Metallurgical Group is pushing ahead with a copper project in war-torn Afghanistan that would test the resolve of even the most fearless mining executives in the West.

First the company has to clear a 4,135-sq.-km area that is riddled with land mines that have already claimed the lives of 89 Afghans and protect its mining and construction crews from Taliban fighters.

Then, as part of the deal, the Chinese state-owned company must build Afghanistan’s first national railway stretching from the country’s border with Uzbekistan in the north to its border with Pakistan in the southeast. It also has to build a 400-megawatt power plant, a coal mine (to fuel the power station); a smelter; groundwater system; roads, houses, hospitals, mosques and schools. (Excess electricity from the power plant will be rerouted to Kabul.)

Two years after winning the bid for the Aynak copper field, about 35 km south of Kabul in resource-rich Logar province, China Metallurgical Group appears ready to get started. The company has already built a compound to house Chinese workers and is busy paving a road to the project, according to McClatchy newspapers. A ribbon-cutting ceremony marking the launch of the project was held on July 9.

The Aynak deposit is the largest and best known copper deposit in Afghanistan. It is of Vendian- Lower Cambrian age and is divided into two areas, Central Aynak and Western Aynak.

Aynak was discovered by Russian geologists in 1974 and is estimated to contain 240 million tonnes grading 2.3% copper in the central portion of the deposit, according to Afghanistan’s Ministry of Mines and Industries. More resources are to be found in the western portion of the deposit, the ministry notes on its English-language website, but are “less well defined.” The deposit outcrops at surface, making it amenable to open-pit mining methods.

Afghanistan sits astride the collision zone of the Indo-Pakistan and Asian crustal plates (which created the Himalayas). Afghanistan’s Ministry of Mines notes that Soviet geologists delineated several large orebodies and a number of small lenses at Aynak and classified Aynak as a sediment-hosted stratiform copper deposit (stratabound and disseminated through dolomite marble and schist).

At a 0.4% copper cutoff, they reported that the main orebody at Central Aynak extends 1,850 metres along strike and 1,200 metres downdip and has a maximum thickness of 210 metres. At Western Aynak, the Soviet geologists noted that the main body extends 2,230 metres along strike and 1,640 metres downdip and has a maximum thickness of 214 metres, based on a similar cutoff grade.

According to the Afghan embassy in Washington, D. C., infrastructure building associated with the project and the mine itself will directly employ 8,000 Afghans (in addition to 30,000 indirectly) and the Chinese mining company will pay about US$350- 400 million in taxes each year. On its website, it said that de-mining activity in the area began in June and is due to be finished by December 2010.

Afghanistan’s Mines Ministry, with the help of the World Bank and the British Geological Survey, brought in a new mining code in 2005. Tenders were invited for Aynak in 2006.

China Metallurgical Group outbid six other companies for the US$3.5-billion contract, including Hunter Dickinson, a private mine developer based in Vancouver, Phelps Dodge (now part of Freeport-McMoRan Copper & Gold [FCX-N]), the London-based Kazakhmys Consortium, and Strikeforce, part of Russia’s Basic Element Group.