Afghan media reports says President Mohammad Ashraf Ghani has ordered to terminate two major Afghan mining contracts.

The president has reportedly ordered to terminate the contracts for gold mine in Badakhshan Province and Balkhab copper miner of Sar-e Pul.

According to Khaama Press, the decision was made last Wednesday at a meeting of the High Economic Council, chaired by the president.

Abdul Qadeer Mutfi, the spokesperson for the Ministry of Mines and Petroleum was quoted as saying that the contracting company has not fulfilled its commitments as per the contract documents and therefore the members of Afghanistan’s High Economic Council have decided to go for the contracts termination process.

According to the Turkish Afghan Mining Company (TAMC) and its local partner Afghan Gold and Mineral Company (AGMC), the 4 key obligations of the contractor have already been completed before the deadline of November 7, 2019, but only the last element which is provision of performance bond has not yet provided due to the unknown political situation, and the contractor had appealed for a period extension until the Afghan presidential elections results are announced and the new government is in place, Khaama Press says.

In a letter dated November 6 2019, which was addressed to the Large-Scale Mining Committee of Afghanistan, the contractor said that they have fulfilled the 4 key elements of the contract which includes the following: 1) a baseline environmental and social survey for the Badakhshan Gold project area; 2) an exploration plan for Badakhshan Gold with a project schedule, detailed description of the proposed activities, a justification for why those activities are being proposed and a detailed budget that corresponds to the schedule and our proposed activities; 3) an environmental impact mitigation plan related to the activities proposed in the exploration plan; 4) and an environmental remediation plan related to the activities proposed in the exploration plan and their impacts.

Several obstacles currently impede our immediate progress, however, we believe these obstacles to be temporary, said the company.

The letter also indicates that the contracting company has requested the government for another six months extension until the political situations get stable and they can fight with the barriers and obstacles including the security issues by then.

A founding member and partner of the company told Khaama Press that the decision made in the High Economic Council is political and is in contrast to the discussions they have had with the ministry of mines and petroleum and the large-scale mining committee.

The Afghan partner for this contract is the ex-Minister of Urban Development and Housing, Sadat Mansoor Naderi, who comes from a political sector and supported President Ghani in the 2014 elections, but in the 2019 election his family and political party endorsed Abdullah Abdullah.

These two contracts were reportedly signed in October 2018 after a 6-year tendering period.

Ian Hannam, a former JPMorgan Chase & Co. banker and the co-owner of Centar Ltd., signed the contracts with the Afghan officials during a ceremony held at the Embassy of Afghanistan in Washington last year on October 5.

Afghanistan’s acting Finance Minister Mohammad Humayoun Qayoumi and the Minister of Mines and Petroleum Nargis Nehan attended the signing ceremony on behalf of the Afghan government.

According to the contractor, the exploration works at the two sites were scheduled to begin this year, covering a 500 square kilometer area for the exploration of copper in Balkhab in North of Afghanistan.

These contracts valued over 600 million dollars, which were supposed to initiate with an initial investment of 78 million dollars by the extractors.