Kilo Goldmines reported to win iron mining concession in Afghanistan

It has been reported that Kilo Goldmines of Toronto was awarded one of four concession blocks that comprise the Hajigak iron ore reserve in Afghanistan by the Afghan ministry of mines. The company, however, issued a press release saying that they have not been notified of this by the Afghan government.

According to earlier reports, Kilo Goldmines beat out companies from Iran and the US in securing the rights to the prized Hajigak ore, the largest iron ore deposit in Asia. A consortium of Indian companies won the other 75 per cent of the development. The president of Afghanistan, Hamid Karzai, was reported to have awarded the rights. The Hajigak deposits are located 130 kilometres west of Kabul in the mountainous Bamyan Province and boast a concentration of approximately 62 per cent Fe. In addition, there are coal resources near the iron ore which is suitable for blast furnaces and smelting. It will require investments in the tens of billions of dollars to develop the mine and the transportation, communications and energy infrastructure to support it.

In its statement concerning the matter, Kilo said, "If awarded, the project would be held in a new entity with Kilo receiving an initial 20% interest, subject to dilution but with no funding obligation."

Despite the fact that Kilo Goldmines has stated that they are unaware of having been awarded any mining rights, Canada’s minister of international trade has said that the investment by the company in Afghanistan will “create jobs and prosperity for Afghans and Canadians alike.”

Afghanistan is estimated to hold up to $3 trillion in mineral wealth from gold, copper, iron ore and precious stones to oil, gas and rare earth minerals, according to recent estimates.