A New York Times article–which proclaimed that Afghanistan has at least $1 trillion in undeveloped mineral wealth-met with serious skepticism Monday among the world’s press, who questioned the timing and motive behind the Pentagon’s Sunday night disclosure.
Some have accused the Pentagon of deliberately leaking the information in an effort to give Washington more time for the military’s Afghanistan surge.
However, others say that while news of the U.S. Geological Survey’s discovery may not be entirely new, it still offers a window of opportunity for Afghanistan’s economic future.
Still others suggest the model of developing Afghanistan’s mineral wealth might be more akin to the brutality of the Democratic Republic of the Congo in terms of lack of security and stability for foreign mining investors. Former Afghan Finance Minister Ashraf Ghani told the website Politico that the country has come to a critical juncture as far as development of its mining sector. “Either we become the Congo, or we become Botswana or Chile.”
He called the announcement by the Pentagon and the USGS a “game changer: for the first time in our history we have the possibility of domestic resources…to be able to afford both security…but more significantly to be able to provide substantial services to the population.”
Skeptics point out Soviet mining experts long ago compiled data and charts regarding Afghanistan’s mineral potential during their occupation of the country in the 1980s.
A special supplement published by the Mining Journal in August 2006 highlighted the copper, lead and zinc, chromite, PGM, gold, uranium, iron, gemstones and other metal deposits which have either been historically exploited, or are good candidates for further greenfields exploration.
Another recent supplement published by Afghanistan’s Ministry of Mines and the British Geologist Survey focused on considerable rare metals deposits that may be found in Afghanistan. The publication noted, “No systematic modern exploration has been carried out since the withdrawal of Soviet forces and many of the known localities warrant further investigation and exploration based on modern mineral deposit models and techniques.”
British Geological Survey economic geologist Antony Benham worked on the Afghanistan Geological Survey from 2006-08. In an article for The Independent website, Benham asserts that mining companies have always known about Afghanistan’s mineral potential.
“Of course, the security situation has made it very difficult for any mining company to get involved, and so there’s not really any mining industry at present-and very little infrastructure, either,” he said.
However, he noted, “A mining law was recently published, which is progress, but with no history of large scale operations it may take the Afghan government and any mining companies some time to establish how to work together.”
“In theory, if the security situation did stabilize, there would be a lot of opportunities for mining companies to get involved in looking for these new resources,” Benham advised. “But this isn’t going to be an overnight, quick-win situation. It’s going to take a long time for Afghanistan’s mineral deposits to be developed to their full potential.”
Ryan Witt of the Political Buzz Examiner suggested, “The discovery gives the United States more reason to stay in the country, as Afghanistan will not play a much larger role in the global economy of the future. At the same time, the discovery may raise criticisms of American imperialism in the country.”
“The mineral deposits may also give the Taliban more reason to fight for the country,” he advised. “If the Taliban were to gain control of the country, they could profit handsomely from the deposits and use those resources to support terror activities.”
“Finally the discovery of the deposits may help stabilize the country, or plunge Afghanistan into a civil war,” Witt suggested. “If properly handled, the deposits have the potential to bring prosperity to a country that has been impoverished for decades. However, good leadership in Afghanistan is lacking, and without proper management the minerals could actually do more harm to the nation.”
Last January, the Wall Street Journal observed that mining could be a major economic contributor. Reporter Matthew Rosenburg suggested that the “Mines Ministry has long been considered among Afghanistan’s most corrupt governments departments, and Western officials have repeatedly expressed reservations about the Afghan government awarding concessions for the country’s major mineral deposits, fearful that corrupt officials would hand contracts to bidders who pay the biggest bribes-not who are best suited to actually do the work.”
The allegations that Mines Ministry corruption has played a major role in the awarding of the Aynak Copper Tender were spread by the U.S. State Department through a leaked story to the Washington Post last November.
However, Mineweb subsequently learned that the World Bank and Lakewood, Colorado consultants Gustavson Associates helped guide the Mines Ministry through the Aynak tender process. In an e-mail to Mineweb last November, Transaction Advisor Bill Crowl wrote,” The tender was conducted transparently and the results were vetted by several independent groups.”
“There are a number of disgruntled individuals and a few companies that did not prevail in the bidding who stand to gain from this witch hunt,” Crowl asserted. Instead, Crowl said the reality was that the Chinese company that won the Aynak tender “committed to strict adherence to international best practices, upholding the World Bank Equator Principles, the Guidelines for Health and Safety, relocation standards and most importantly, aggressive Afghan employment goals.”
The World Bank and other international groups have also highlighted the country’s mineral potential in recent years.
U.S. GOVT CLIMBS ON PRO-(FOREIGN) MINING BANDWAGON
In 2007, the USGS published a preliminary assessment of non-fuel mineral resources published in cooperation with the Afghanistan Geological Survey, which was funded by the U.S. Agency for International Development.
Written in the typically academic and scientific style favored by geologists, the 2007 document did little to attract news media attention.
However, a promotionally-minded USGS conducted a joint “Special Defense Department Briefing from the Pentagon” with reporters on Monday.
The USGS and the DOD Task Force for Business and Stability Operations in Afghanistan partnered last summer in what Director Paul Brinkley described as “an effort to understand the potential of mineral wealth in Afghanistan and the challenges, which are many, to the Afghans in developing that resource in a socially and environmentally responsible way, but that would lead to economic sovereignty for the people of Afghanistan to give them the ability to pay for their own development and to pay for their own security, and to enable the eventual reduction of all the investment the international community is making, but most importantly the investment of the blood of our young men and women that is sacrificed there every day in an effort to secure the future of the Afghan people.”
Jack Medlin, regional specialist for the survey’s international program, told the news media that the agency has been working in partnership with the Afghan Ministry of mines and the Afghan Geological Survey for the past five years or so.
Brinkley emphasized “it’s very important for everybody to recognize that between here and an economically sovereign, sustainable Afghan economy that uses or has the use of its own mineral wealth is not a quick win.”
He characterized the state of mining in Afghanistan today “as artisanal mining’ with the noted exception of the Aynak copper deposit lease.
Medlin told reporters that the USGS is verifying existing Soviet data and information they found in the Afghan Geological Survey “in order to make it a bit more attractive to international investors.” The 2007 survey by the USGS included the gathering of high-prospectural data. The agency is now trying to add satellite imagery or airborne geophysics to the mix.
Brinkley stressed “we hope to in the next period of time, near-term period of time-we’ll just leave it at that-to work with Afghans to facilitate transparent, anti-corrupt transactions for some of these mineral deposits that can be developed sooner, to help exercise the legal framework, to help exercise the structures that need to be put in place and then scaled to that the concerns everyone has about what this means-what it would mean to have Afghanistan with an indigenous source of wealth-that those concerns can be dressed, and that the way to do that, we believe is to exercise them via transactions.”
The DOD and the USGS are now trying to identify minerals deposits that are not as capital intensive as copper and iron ore for more rapid development which could jumpstart the fledging Afghan minerals sector.