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Cablegate: Prt Bamyan: Minister Ignites Hope for Energy, Iron

VZCZCXRO7588
PP RUEHPW
DE RUEHBUL #2269 2380546
ZNR UUUUU ZZH
P 250546Z AUG 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 5243
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0661
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEKJCS/OSD WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS KABUL 002269

DEPARTMENT FOR SCA/FO, SCA/A, EUR/RPM
DEPT PASS AID/ANE, OPIC
DEPT PASS USTR FOR LILIENFELD AND KLEIN
DEPT PASS OPIC FOR ZAHNISER
DEPT PASS TDA FOR STEIN AND GREENIP
CENTCOM FOR CG CSTC-A, CG CJTF-101 POLAD
NSC FOR WOOD
TREASURY FOR ABAUKOL, BDAHL, AND MNUGENT
PARIS FOR USOECD/ENERGY ATTACHE
OSD FOR WILKES
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH
TOKYO ALSO FOR AID COUNSELOR AANENSON

SENSITIVE
SIPDIS

E.O. 12958 N/A
TAGS: EMIN EPET EFIN ETRD ENRG KPWR EAID AF CH
SUBJECT: PRT BAMYAN: MINISTER IGNITES HOPE FOR ENERGY, IRON
PRODUCTION

1. (U) Summary: Minister of Mines Muhammad Ibrahim Adel concluded a
week-long visit to Bamyan to explore the feasibility of a coal
driven power plant and conduct a site visit to the Haji Gak iron
deposit. Accompanied by a team of international and national legal
and technical experts, Minister Adel spent most of his visit
exploring central and northern Bamyan. At the conclusion of his
trip, the Minister was optimistic about prospects for an 800 MW coal
fired power plant and soliciting bids for exploitation of the Haji
Gak iron deposit by December 2008.

Using Bamyan Coal to Power Kabul and Mining
-------------------------------------------

2. (SBU) As a part of the Anyak Copper Mine bid and resulting
contract, the Chinese firm MCC committed to building a 400 MW coal
fired power plant to fuel mining operations. Minister Adel was
tasked with exploring the feasibility of increasing the plant's
capacity to 800 MW. The additional 400 MW would serve Kabul's
energy needs and possibly iron mining operations in Haji Gak
district. According to Bamyan Governor Sarabi, Kabul sees the
Ministry of Mines and its power-related projects as an alternative
to the Ministry of Water and Power's slow pace initiating power
imports.

3. (SBU) While Bamyan's Kahmard district holds the best known Afghan
coal deposits, the Minister conducted initial assessments of the
less developed coal deposits in Yakawlang and Sayghan districts.
Two Chinese power engineers accompanying the Minister estimated
there are significant coal deposits in the new locations, especially
in Yakawlang. The Chinese engineers also assessed that an 800 MW
power plant may be viable. No testing has been done, however, to
determine the BTU (British Thermal Unit) value of this coal, how
well it would burn or how much energy it could produce. (Embassy
Kabul Comment: Without additional field testing and/or further
exploration it is not known whether Bamyan coal deposits could
support an 800 MW power plant. Experts familiar with the original
400 MW plant plans estimate it would burn over 1.5 million metric
tons annually. Afghanistan currently lacks the capacity to mine
such a large quantity.)

Mining and Industry Hopes for Bamyan
------------------------------------

4. (U) In addition to the mining operation in Haji Gak, the Minister
also discussed a steel factory planned for the Dasht-e-Qashka area
of Bamyan. He estimated this factory and associated facilities
would support thousands of jobs. In his concluding press conference,
the Minister said he would solicit bids for the Haji Gak Iron Mine
by December 2008. (This date depends on the Ministry's ability to
prepare the necessary tender documents.)

5. (U) Comment: Large-scale coal and iron mining would introduce the
first major industrial activity in Bamyan. The level of Chinese
involvement in the Minister's assessment and MCC's successful bid
for the Anyak Copper Mine, with its attendant transportation and
power commitments, could advantage Chinese companies bidding on the
Haji Gak deposit. Eighty-six percent of Bamyan's population
subsists on agriculture; the cash brought by industrial jobs could
help ease tension over land ownership and alleviate some poverty in
the province, but should be carefully monitored. Such industrial
activity as proposed by Minister Adel could profoundly impact
Bamyan's environment and cultural heritage (Dasht-e-Qaska is located
near the Red City Heritage Site).

WOOD

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