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Canadian mining firm among companies shortlisted for Afghan iron deposit

A Canadian mining company has made the shortlist to bid for Afghanistan's giant Hajigak iron ore deposit.

Toronto-based Kilo Goldmines Ltd. is one of the companies the Afghan Mines Ministry invited this week to bid on what it claims is Asia's largest unmined iron deposit.

Fifteen of the shortlisted companies are from India, two are from Iran, and the rest are from the United States, Turkey, China, Britain and Australia.

"We are very happy with the group of companies that have been shortlisted. They represent the high level of international interest in developing Afghanistan's mineral wealth," Mines Minister Wahidullah Shahrani said in a statement.

Kilo Goldmines has gold and iron ore properties in the Democratic Republic of Congo.

The U.S. Geological Survey and the Pentagon estimate Afghanistan is sitting atop nearly $1 trillion in untapped deposits of iron, copper, cobalt and gold. Thick veins of industrial metals such as lithium, a key component in batteries for laptops and smart phones, also run through the country.

The Afghan government estimates the Hajigak deposit, in the country's mountainous Bamyan province, has some 1.8 billion tons of iron ore.

The mines ministry has set an early-August deadline for bids, and exploration is expected to begin next year.

"We look forward to a successful bid round and to the eventual development of Hajigak," Shahrani said.

"The development of Hajigak will involve major infrastructure improvements and will stimulate the local economy and improve the lives of the citizens of Bamyan province and beyond."

Most of the deposit is in Bamyan province, 130 km west of the capital, Kabul. The rest of the deposit spills over into neighbouring Parwan and Wardak provinces.

Violence has flared recently in those areas as insurgents mount attacks away from their southern strongholds, including Kandahar province, where the bulk of Canada's soldiers are deployed.

Aside from the violent attacks that discourage foreign investment, Afghanistan's mining industry can charitably be described as fledgling. The country lacks much of the basic infrastructure needed to tap its supposedly vast mineral resources.

Another impediment is Afghanistan's government. Corrupt officials routinely line their pockets with ill-gotten money.

The mines ministry is no stranger to allegations of graft. In 2009, the mines minister of the day was accused of taking a $30 million bribe to award a multi-billion contract for a copper mine to a Chinese company. He denied the charges, but President Hamid Karzai sacked him anyway.

Another Canadian company, Hunter Dickinson, had bid on the Afghan copper mine.

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