KOLKATA (miningweekly.com) – The exuberance over India and Afghanistan collaborating in the minerals and metals industries is giving way to a reality check, as revealed during Afghan President Hamid Karzai’s three-day Indian visit, which ended on Wednesday.

Ongoing roadblocks to projects in the mining and mineral sectors, or any future collaboration potential, figured high in the list of priorities during Kazai’s meeting with Indian Prime Minister Manmohan Singh and the Indian business community.

According to official and unofficial briefings on the visit, while the Afghan President did seek higher Indian investment in sectors like health, agriculture, healthcare and food processing, collaborations in the mining and minerals sectors, which had made some headway, were made little mention of, despite the uncertainties surrounding these projects.

On the contrary, the primary Afghan ‘wish list’ included military hardware and weaponry, which remained an unfulfilled request.

Government officials present during Karzai’s interactions with Indian industry representatives said that while generic issues concerning industrial collaborations, such as the exchange of sectoral business delegations and the setting-up of India-Afghanistan CEO forums, were discussed, specific projects were not mentioned.

It had been expected that macro-issues impacting high-profile mega investments already committed to by Indian mining and mineral companies would have figured in the bilateral talks, an official in Mines Ministry said.

However, other Indian government officials were not as perturbed, on the grounds that bilateral summit meetings were used to lay down diplomatic and economic policy contours and not to discuss specific issues, which were best left to other official-level exchanges.

Nonetheless, Indian officials said that even at delegation-level talks, Indian proposals that an Afghan National Institute of Mining, along the lines of Indian School of Mines, had not been taken up, except for allusions to its construction “in the near future”.

Significantly, the India-Afghanistan showpiece project and largest foreign direct investment in that country, the $11-billion iron-ore and steelmaking facility undertaken by a consortium led by Steel Authority of India Limited (SAIL), is slated to be pruned dramatically in the face of geopolitical, security and infrastructure issues.

It has been reported that the Afghan Iron & Steel Company Limited consortium would scale back the steelmaking project from six-million tons a year to a smaller one- or two-million ton a year pilot project, and expand later, depending on “how the situation develops along the road”.

The consortium has conveyed to both governments that, as the project located in Afghanistan’s Hajigak province is completely landlocked, it would be vulnerable to infrastructure, logistics and security uncertainties.

Indian officials involved in overseas Indian mineral projects observed that India-Afghanistan summit meetings have also been silent on the proposal for developing the Iranian Port of Chabahar along the Iran-Pakistan border, as a transportation point out of Afghanistan and an evacuation link for mineral assets in the Hajigak region.

Despite a trilateral agreement between India, Iran and Afghanistan on development of Chabahar port and allied road linkages to the Afghan heartland, in 2003, construction at the ground level had been tardy.

Despite the project having geopolitical implications involving the three countries, along with Pakistan, such issues have not figured very high at summit-level bilateral dialogues involving the countries, officials said.

Courtesy: mining weekly.com