Afghanistan cancels contract to US gold, copper miner

Afghanistan’s news agency Khaama Press reported that President Mohammad Ashraf Ghani cancelled the contracts held by the Turkish Afghan Mining Company TAMC and the Afghan Gold and Mineral Company AGMC, which allowed them to exploit the Badakhshan gold mine and the Balkhab copper mine in the northern Sar-e-Pul province.

Both TAMC and AGMC are joint ventures (JVs) formed by US-based Central Asian Resources Limited, better known as CENTAR.

According to the news report, the country’s economic council, which is chaired by the president, made the decision arguing the companies have not fulfilled their contractual commitments.

However, in a letter sent to the Large-Scale Mining Committee of Afghanistan to which Khaama Press got access, TAMC and AGMC said that they have fulfilled four key obligations in their contracts.

The companies however have listed a series of contractual obligations that they have already completed. The one thing the miners haven’t done is the provision of a performance bond. In their correspondence, they say this is due to the unknown political situation in Afghanistan, where people are still waiting for the delayed results of the September 28th presidential election.

Within this context, TAMC and AGMC asked for a six-month extension to provide the bond.

The mining companies involved in the projects since the signing of the final contract in October 2018 have said that they had planned to start exploring before the end of 2019.

For decades, the 1,000-square-kilometre Badakhshan gold project has been the source of the yellow metal for hundreds of artisanal miners. In the 1970s, Russian geologists documented a series of gold-bearing occurrences on the site and generated a small indicated resource. The Balkhab copper project, on the other hand, is an early-stage exploration project covering a 500-square-kilometre area. It is marked by occurrences of sulfide and oxide copper ores, the latter of which has a history of mining and processing at the site that stretches back an estimated 3,000 years. 

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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