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Afghanistan Cancels US Gold, Copper Miners Contracts

Afghanistan Cancels US Gold, Copper Miners Contracts

KABUL – The Afghan government has terminated the two extraction contracts of Badakhshan’s gold mines and Sar-e Pul’s Balkhab copper mine.
The Ministry of Mines and Petroleum (MoMP) said on Sunday that President Ashraf Ghani ordered the termination of the contracts during a High Economic Council meeting last week.
“A few days ago, the High Economic Council had decided to terminate the contracts of Badakhshan’s gold mines and Sar-e Pul’s Balkhab copper mine,” the Ministry spokesperson Abdul Qadir Mutfi said.
In 2012, Turkish and Afghan companies and an English company won bidding for Badakhshan gold mines and Balkhab’s copper mine in which the former minister of urban was the main stakeholder.
The two companies were supposed to invest $ 87 million on these projects.
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, TAMC and AGMC said that they have fulfilled four key obligations in their contracts.
In the missive, the companies say they have completed a baseline environmental and social survey for the Badakhshan gold project area; developed an exploration plan for Badakhshan with a project schedule, detailed description of the proposed activities, a justification for why those activities are being proposed and a detailed budget that corresponds to the schedule and our proposed activities; designed an environmental impact mitigation plan related to the activities proposed in the exploration plan; and outlined an environmental remediation plan related to the activities proposed in the exploration plan and their impacts.
Both TAMC and AGMC are JVs formed by US-based Central Asian Resources Limited, better known as CENTAR.
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.
“Our investors are committed to making this a reality. In order for that to happen, they, like any experienced mining investor will need an environment that is supportive of mining project development. Granting an extension of the performance bond obligation until May of 2020 at this time, will help maintain their belief that Afghanistan still holds the same promise it did when they invested in 2011 and will be a concrete example of the level of support of the Government of Afghanistan,” CENTAR’s CEO, Bradley Barnett, wrote in the letter.
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.
(Sahar News)

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