Sar-i-Pul, Badakhshan mines conundrum remains unsettled

KABUL (Pajhwok): The mining contracts of Balkhab copper reserve in Sar-i-Pul province and a gold mine in Badakhshan province have been twice signed and revoked in the past eight years and once delayed due to the conflict of interest.

The Balkhab copper reserve in Balkhab district is considered to be the world’s largest natural reservoir of copper while the Badakhshan Wikado gold reserve is situated in Ragh district. The mine is 200 metres wide and 350 metres long.

According to reports, a draft strategy of Balkhab copper mine and Badakhshan gold mine was finalized back in 2013. It was sent to the Council of Ministers meeting in 2014 for approval. But in 2014 after the inception of National Unity government, a debate began on conflict of interest and lack of capacity in the Ministry of Mining and Petroleum.

The debate caused delay in launch of practical work on these sites and according to sources the then Urban Affairs Minister Syed Saadat Mansour Naderi was considered to be shareholder of companies to which the contracts of these mines were supposed to be handed over.

The draft contract of these two mines with the Turkish Afghan Mining (TAM) and Afghan Gold and Mineral (AGM) Companies was presented to the High Economic Council (HEC) and the council decided to revoke the bidding process for these two mines.

After this decision, the then Mining and Petroleum Minister on September 23, 2018 signed the contract of these two mines with TAM and AGM companies in the US. It is worth mentioning that Naderi had resigned from the ministry in May 2018.

After the signing ceremony, then minister Nihan said the contracts were signed in the Afghan Embassy in Washington in order to gain the confidence of the US to invest in Afghanistan. Afghanistan Embassy in Washington is Afghanistan’s land in the US, she said.

But a well-placed government source told Pajhwok Afghan News that in case the contract of a mine was canceled or frozen, the government has to re-announce its bidding process, but MoMP without second time announcement of bidding signed the contracts with TAM and AGM.

The source said Naderi held 51 percent shares in AGM and 49 percent share in TAM, adding that in order to get these contracts he resigned from the ministry.

This comes at a time when article 16 of the mining law says: “Public office holders like the president, his deputies, ministers, MPs and other high ranking officials are not eligible to get any mining contract five years after they resign from their job.”

But legal advisor of these companies Mohammad Ismael Sahed said: “These contracts are processed through 2012 bidding process and the 2014 law cannot be applicable on this. This cannot be interpreted through the new law.”

He said Naderi has no shares in these two companies but headed one company without having shares while in another company he served as deputy head.

A document from inter-ministerial commission says: “AGM company is registered in Afghanistan and belongs to Syed Saadat Mansour Naderi. The TAM company is a joint venture of two Turkish companies and one Afghan company and is working in Afghanistan. The company Afghan shareholder is Syed Mansour Naderi.”

Non-payment of guarantee money to govt:

Based on the contract, the Turkish Afghan Mining Company should have invested $22 million in relevant projects in Badakhshan and the Afghan Gold and Minerals Company $56 million in Sar-i-Pul province.

These companies should also have paid guarantee money to the government after 120 days of working in Sar-i-Pul copper mine and 90 days working in Badakhshan gold mine.

Inter-Ministerial Committee of the Ministry of Mines and Petroleum in a decision letter on the regard said, “Executive guarantee is 30 percent of total the money offered by the company in its proposal during exploration phase, which is approved by participants of the meeting in presence of the documents.”

Shahid said that the companies should have presented their exploration plan to the ministry after the contract and should have paid guarantee money before obtaining their license, but the companies requested two times extension of time after three months in order to avoid payment of the money.

He said that the Ministry of Mines and Petroleum extended the period for three months and the High Economic Council for six months.

This comes as there is no any mention of time extension in the law and companies should pay guarantee money within 90 or 120 days.

However, the contracts were cancelled by the president on December 1, 2019 for non-implementation of commitments.

On the other hand, Mohammad Aziz Gharwal, spokesman of Mines and Petroleum Ministry, said that the government did not suffer any losses.

“After signing of the agreement, winner companies were responsible to present their working plan before they could receive their exploration license from the ministry and pay guarantee money. But these companies failed to present their working plan, they requested extension of time many times, that was the reason their contracts were cancelled,” he said.

Mohammad Ismail Shahid in this regard said, “Providing guarantee for performance bond requires high amount of investment, and it depends on the start of exploration activities, it was election time and winter in 2019 which was the reason exploration activities were not started and the companies failed to provide guarantee money…”

In response to a question about the delay in time extension by the ministry despite there is no mention for it in the law, he said, “These companies requested time extension due to problems and the ministry also agreed with them, it does not prohibit extension of time.”

Based on the law an agreement between the government and companies, any part of the contract, is amendable and companies can extend time, he said.

In response to a question about awarding the contracts to the mentioned companies without a bidding process in 2018, he said the Ministry of Mines and Petroleum had shared problems in this regard with the High Economic Council.

Legal advisor to the companies after cancellation of their contracts and a second signature of them said that the contracts had not been cancelled.

“The directive of the High Economic Council was only an advice and view… if you check it closely they have written that the bidders should be informed and the government did not warn companies of cancellation of the process…” he concluded.

Nh/Mds/ma

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