Seven Indian companies, led by the state-owned Steel Authority of India (SAI), won a $10.3 billion deal to exploit three of four blocks at the Hajigak mine in Bamiyan, central Afghanistan, said ministry official Abdul Jalil Jumrani.
A fourth block was awarded to Canada's Kilo Goldmines, he said, with contracts due to be signed in February or March and exploitation of the mine's estimated two billion tonnes of iron ore deposits expected to begin by 2015.
Last month, Afghanistan signed a strategic partnership deal with India aiming to boost trade, security and cultural links, triggering consternation in neighbouring Pakistan.
Afghanistan is believed to have mineral reserves worth as much as $3 trillion which could theoretically generate billions of dollars in tax revenue for the troubled country.
But exploitation of these resources faces massive hurdles due to ongoing instability after 30 years of war in the country, woeful infrastructure, and endemic corruption.
As part of the Hajigak deal India has pledged to invest in surrounding infrastructure projects, including $1 billion to build a railway and monies for a 800-megawatt power plant and 200-kilometre road, Jumrani said. Kilo Goldmines will invest $3.2 billion, he added.
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