Afghanistan’s Mine and Petroleum Minister Daud Shah Saba has said the Aynak copper mine extraction project is not in the interest of the country and he will refrain from the signing of the contract with previous terms and conditions.There have been no progress in preliminary works of the project despite seven years have passed since the project was signed. The Chinese company (MCC) which was awarded the project, has sent the feasibility study draft to the Ministry of Mines and Petroleum five and half years after the project was awarded. The company has not considered the environmental and social effects of the project in their assessment. MCC has also stated that most of the commitments are not achievable based on their feasibility study. MCC does not have an office in Kabul and the Ministry will resume talks with the company regarding the project. Mes Aynak copper extraction is considered to be one of the largest mining projects in Afghanistan which was expected to generate a revenue of 300 to 400 million dollars to Afghan government annually once the extraction process reaches its peak. The Afghan government also estimated around 250,000 tons of copper would be extracted from the copper mine located in central Logar province of Afghanistan.(20150604)

Senior officials on Monday 20141208 said 86 security posts had been set up around the Ainak copper mine in central Logar province and urged investors to resume work on tapping the world’s largest deposits. Brig. Gen. Mohammad Nasim Massoud, the commander of special security forces for the mine, told reporters near the site that 1750 policemen had been deputed to keep security for the project.(20141208)

The contract between Afghanistan and a Chinese company at a Copper Mine in Logar province faced with stalemate as the Ministry of Mines and Petroleum said the existence of historical relics delayed the work in the project. “The contract reached to stalemate because it is against the law of mining in the country,” said Nasir Ahmad Durani, deputy Minister of the Mines and Petroleum.(20131223)

China Metallurgical Group (MCC) and Jiangxi Copper want new terms. They have demanded a review of a landmark $3 billion deal to produce copper in Ainak, Afghanistan that would cut royalty payments to the government by almost half to 10 percent as well as delay production to 2019, release them from building a power plant and copper smelter, and postpone the laying of a railway.(20130826)
 

Afghanistan's plan to develop its estimated $1 trillion worth of mineral resources received a serious blow when China announced its desire to undo a multi-billion dollar agreement to help create a mining industry in the war-torn nation.

The deal, inked in 2007, was to send $3 billion of Chinese investment into the world's second largest copper deposit, the 5.5 million-tonne Mes Aynak near Kabul.

With little more than a year remaining until international forces exit Afghanistan, without firm Chinese support on the horizon, the government may now be forced to scale back plans for attracting mining companies to exploit its minerals reserves, including copper, gold, iron ore and rare earths.
 

Complex security obstacles aside, Afghanistan's timing may prove to be off. With China's economy – and the economies of other major developing nations – showing signs of slowing, weak commodities prices, and massive, industry-wide cost-cutting, Afghanistan may have missed its window to take part in the boom. (201300920)

"The Chinese were going to build the railway for the Aynak mine, and now the Chinese company don't want to build this railway, so the question is (how to find) another, alternative way to export iron," the official said. He added that other issues in the contract that had come up for review included a plan to built a steel plant. "Maybe within a month or two months we will restart the negotiations," he said.(20131029)

Background:
Mes Aynak Ainak ("little copper well") is a site 25 miles (40 km) southeast of Kabul, Afghanistan, located in a barren region of Mohammad Agha District, Logar Province. The site contains the world’s second largest copper deposit, as well as the remains of an ancient settlement with over 400 Buddha statues, stupas and a 100-acre (40 ha) monastery complex. It is also considered a major transit route for insurgents coming from Pakistan. Archaeologists are only beginning to find remnants of an older 5,000-year-old Bronze Age site beneath the Buddhist level including an ancient copper smelter. The Buddhist ruins are scheduled to be destroyed at the end of December 2012.

In November 2007, a 30-year lease was granted for the copper mine to the China Metallurgical Group (MCC) for US$3 billion, making it the biggest foreign investment and private business venture in Afghanistan’s history. Allegations have persisted that the then-minister of mines obstructed the contracting process and accepted a large bribe to eliminate the other companies involved in the bid.

The Afghan Mining Ministry estimates that the mine holds some six million tons of copper (5.52 million metric tons). The mine is expected to be worth tens of billions of dollars, and to generate jobs and economic activity for the country, but threatens the site's archaeological remains. The site is accessed via a 15 kilometers (9.3 mi) motorable track from the surfaced road between Kabul and Gardēz.The mining lease holders propose to build a railway to serve the copper mine. As of July 2012, MCC has not developed an environmental impact plan, and has remained secretive about feasibility studies, and the plan regarding the opening and closing of the mine, as well as any guarantees contained in the contract. International experts have warned that the project, and other similar projects in Afghanistan, could be threatened because MMC has not fulfilled promises made to the Afghan government, such as the lack of provision of proper housing for relocated villagers. Other investments that have yet to be fulfilled include a railway, a 400-megawatt power plant and a coal mine.A report by Global Witness, an independent advocacy group that focuses on natural resource exploitation, said there was a "major gap" between the government's promises of transparency and its follow-through.