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The Killid Group
The Afghan Mines, Untouched TreasuryWritten by By Noorullah Kohestani
Saturday, 26 June 2010 13:33
Afghanistan's economic landscape could be transformed with the recent discovery of large mineral deposits in the country which indicates it could be one of the most important sources for minerals. However the opportunities for that will depend both on the investment as well as the Afghan ownership safeguards for their exploitation.
According to a NASA survey, Afghanistan has approximately 1400 different mineral varieties including lithium, cobalt, copper and gold. The survey was conducted at the behest of the Afghan Ministry of Mines which signed a contract worth $36 million with NASA for the survey. The survey covered the entire country with the exception of Helmand and Badakhshan and mineral deposits worth several trillions were discovered.
"The main minerals are iron, copper, coal, oil, gold, gas and a number of unique and irreplaceable metal such as Lithium and many precious stones", Wahidullah Shahrani, the Minister of Mines told reporters during a press conference. Lithium is a precious and valuable metal which is used in producing battery mobiles, laptops and other electronic machinery.
Exploiting these minerals will require paving the way for large-scale investments by foreign investors as Afghan investors lack that capacity. "The Afghan traders can invest at least $10 million for small and medium mines, but they will not be able to invest their money in big mines across the country" says Qurban Haqjoo, Head of Afghan Commerce and Industry Chambers. "The Afghan government should make sure of foreign investment to exploit these mines" he said. But economic experts point out that foreign investment will also means that it is they who will benefit from the mines rather than the Afghans.
"Lack of rule of law has enabled foreign investors to benefit from Afghan mineral resources" says Professor Masoud, Afghan economical expert. Strict measures were required to prevent this, he said, so that most of the profits don't go to foreign investors. "If exploiting these mines can create jobs for Afghan workers it will be considered a good step. But if these mines are being discovered by foreigners and investors, there won't be any benefit for Afghans and no change in their living conditions, says Lotfullah, a daily wage labourer who spends many days waiting in the Kot-e-Sangi square of Kabul looking for employment.
According to Shahrani, "the contracts and oversight to this project are being controlled by Afghan government and its international donors." He said attempts were being made to attract foreign investors and he referred to his visit to London where he had provided information about the Hajigak mines in Bamiyan province to 200 foreign investors.
It is clear that the process of exploitation of Afghan mines will take many years and there will be no immediate benefits to the lives of Afghans. Another problem regarding exploitation of the mines is the insecurity.
"The exploitation of Afghan mineral resources is not an easy job. I cannot imagine how you will exploit these mines in Afghanistan, while there are ongoing heavy military operations over there?" says Stephan Snook, researcher in the International strategic studies center.
Shahrani agrees lack of security in the country is a problem in reaching these goals, but hopes the problem can be solved in coordination with Afghan and international forces as soon as possible. Another cause of delay is weak governance. Sayed Rahim Hashemi, an Afghan economic expert believes that if the governance remains as it is it would be impossible for Afghanistan to become an enriched country through the mining sector. In the current scenario where Afghan and Coalition Forces were engaged in battle it would be hard to convince investors to invest large amounts of money in Afghanistan.
On the other hand, the discovery of the minerals also increases the strategic significance of Afghanistan, and global powers may make greater efforts to influence this country.
Another issue of concern is lack of transparency about the terms of the contracts. For example, the former Minister of Mines was accused of taking a bribe at the time of these contracts to actually make this possibility stronger.
Last year, the Arman-e-Millie Daily Newspaper alleged Afghan officials in Ministry of Mines had taken bribes worth nearly $ 30 million for a 3-year contract with "Ganj-e-Hozour" company. However the former Minister of Mines refuted this during a press conference last August.
"These contracts should be signed and controlled through strict oversight in order to stop financial corruption" says Engineer Abdullah who has just graduated as a major in geology from Kabul University. "If this news (about corruption) is right and such cases happen, the main profit will come to those pockets that have influence in these administrative affairs and the role of the people will be zero."
The Minister however insisted that would not be the case. "We have taken measures for making of transparent contracts, ensuring how oversight is implemented on these contracts, laws and policies." According to Shahrani, the Afghan mineral laws were approved in 2004 and a strategic plan of Ministry of Mines has recently been adopted.
If Afghan officials can deal with current problems such as weak governance and administrative corruption, then investment and exploitations of the mineral wealth and creation of job opportunities can bring an end to war and insecurity in the country.