Copper-hungry China launches Aynak project 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, at the same time as it protects its mining and construction crews from insane 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. As if that weren’t enough, it has to construct 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 re-routed to Kabul.)

Two years after winning the bid for the Aynak copper field, about 35 km south of Kabul in Afghanistan’s mineral-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 site, according to McClatchy newspapers. A ribbon-cutting ceremony marking the launch of the project was held on July 9.

The Aynak copper deposit 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 and Industries notes that Soviet geologists delineated several large orebodies and a number of small lenses at Aynak and classified it as a sediment-hosted stratiform copper deposit (stratabound and disseminated through dolomite marble and schist).

At a 0.4% copper cut-off, they reported that the main orebody at Central Aynak extends 1850 metres along strike and 1200 metres down dip and has a maximum thickness of 210 metres. At Western Aynak the Soviet geologists noted that the main body extends 2230 metres along strike and 1640 metres down dip and has a maximum thickness of 214 metres, based on a similar cut-off grade.

According to The Embassy of Afghanistan 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 that the Chinese mining company will pay about US$350-400 million in taxes each year. It also estimated on its website that demining 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 Dickenson, a private mine developer based in Vancouver, Phelps Dodge, the London-based Kazakhmys Consortium, and Strikeforce, part of Russia’s Basic Element Group.