Will Vast Minerals Discovery Be Good or Bad for Afghanistan?

Reply Sun 13 Jun, 2010 08:16 pm


The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.


The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and Blackberries.


While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.


The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion.


Instead of bringing peace, the newfound mineral wealth could lead the Taliban to battle even more fiercely to regain control of the country.

The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced.

Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral-rich districts. Afghanistan has a national mining law, written with the help of advisers from the World Bank, but it has never faced a serious challenge.


The mineral deposits are scattered throughout the country, including in the southern and eastern regions along the border with Pakistan that have had some of the most intense combat in the American-led war against the Taliban insurgency.


So far, the biggest mineral deposits discovered are of iron and copper, and the quantities are large enough to make Afghanistan a major world producer of both, United States officials said. Other finds include large deposits of niobium, a soft metal used in producing superconducting steel, rare earth elements and large gold deposits in Pashtun areas of southern Afghanistan.

Wow, the Afghanis are in for a life-changing shock to their culture and way of life.

Tribal leaders, international corporations, international governments and bordering neighbors will all be vying with each other and the Afghani people for a piece of the action.

It will be interesting to watch who takes what sides. Will China and Russia now side with the Taliban to take over the country and exploit the riches? Will the US help the Afghani people to learn from our mistakes and protect their natural environment from strip mining? Will Al Queda now return to the country to enrich themselves with the profits?

Will the lithium deposits take away from efforts by Al Gore and others to invest in and invent research and development in improved battery storage for the very young renewable clean energy industry in the U.S?
Reply Mon 14 Jun, 2010 01:11 am
Imo it would be immense bad, the country isn't ready to get such resources, nor benefit from it in a good way, the money will end in the wrong pockets and prolong the war.
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Reply Mon 14 Jun, 2010 04:16 am
I dont think that any vast deposits found in one land that barely exists as a state and has almost no industry will be a setup for a despotic regime or a surge of TAliban takeover of provinces within which are these deposits. SInce much of it lies in the mountainous regions of the West and southwest, these are already the subject of the new campaign against a resurfacing TAliban.

These minerals , especially the Lithium, will need major processing before its in a commercial state for batteries. Long term development for all kinds of batteries for entire new gizmos (not just blackberries) will be based on better and better lithium cells. Most of the worlds recoverable deposits lie in south America lake deposits
and in our own western North Carolina in vast quartz deposits.
If they found deposits of rhodium and platinum itd be a major reason to enter negotiations to help em develop their resources.
Reply Mon 14 Jun, 2010 08:08 am
Probably bad, as most such discoveries turn out to be. Poor Afghanistan! Wouldn't you think that a remote, mountainous nation, peopled largely by nomads, would have been a quiet place?
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Reply Mon 14 Jun, 2010 08:22 am
What kind of environmental impact will the extraction cause? If they just go for the money, and ignore safety, I suspect they're in for a big toxic waste dump anywhere they dig.....
Reply Mon 14 Jun, 2010 08:41 am
If this is just now hitting the press, it makes me wonder exactly how long the US government has actually known about it. Seriously.
Reply Mon 14 Jun, 2010 08:56 am
Eva wrote:

If this is just now hitting the press, it makes me wonder exactly how long the US government has actually known about it. Seriously.


Though you'd think the Russians would have had them out quick smart. The minerals, I mean.
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Reply Mon 14 Jun, 2010 10:14 am
Hell, we have that at almost every mine site in the US. I think that Afghanistan will have a hearty welcome to several industries including environmental cleanup should US or Canada fund any exploration events
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Reply Mon 12 Dec, 2011 01:28 pm
You can have all the rear metals in the world in your country, but the supporting infrastructer's must be in place, I.E. roads, power plants, process facilties, WATER, tons and tons of WATER, chemical suppliers, etc.

So what may appear as a rich mineral bonanza, will be shot down for now and the forseable future, because the cost of extraction, is larger that any profit margin.

Reply Sun 19 Feb, 2012 01:27 pm
February 17, 2012
Problems alleged with major Afghan mining deal
By Jon Stephenson and Ali Safi | McClatchy Newspapers

KABUL, Afghanistan — An Afghan-American company that failed to win a multibillion-dollar contract to develop one of Afghanistan's most lucrative mines alleges that the bidding process was riddled with irregularities and that the winning bidders may not be able to meet production targets.

The claims, which were backed by a former senior Afghan mining official, suggest that a potential key source of revenue for the Afghan government — which will be saddled with massive bills after U.S. forces withdraw from the country — could be in jeopardy.

The Afghan-American firm, Acatco, was one of about two dozen bidders that competed for the right to extract minerals from the Hajigak iron ore mine in Afghanistan's central Bamiyan province. Industry experts have called Hajigak the jewel of Afghanistan's mining sector.

Contracts for developing four sections of Hajigak were awarded in November — three to a consortium of Indian firms led by the state-owned Steel Authority of India, or SAIL, and one to Kilo Goldmines, a Canadian firm. But Acatco said that these companies had failed to demonstrate they had the funds to carry out the project.

"This is against the spirit and the letter of the tender documents," Acatco president Nasir Shansab wrote last month to Afghanistan's minister of mines, Wahidullah Shahrani. He added that "those bids should have been disqualified."

Acatco last week asked Afghanistan's parliamentary complaints commission to investigate the Hajigak contracts, citing illegality and possible corruption in the bidding process. The commission has scheduled a hearing for Saturday and summoned Shahrani, but a spokesman for the minister told McClatchy that Shahrani was departing on an overseas trip and wouldn't appear at the hearing.

A former Afghan deputy minister of mines, Mohammad Akram Ghiasi, who resigned two years ago after accusing Shahrani of illegal and unprofessional conduct, told McClatchy in an interview, "If I was still deputy minister of mines, I would not have declared SAIL and Kilo as the winning bidders."

According to company officials, Acatco, based in Herndon, Va., was the only firm among the six that were short-listed in the bidding that had secured the funding to develop Hajigak. Shansab said the company had $1.2 billion in guaranteed funds. By contrast, he quoted numerous international media reports that said the Indian consortium would struggle to raise money for the project.

SteelGuru, an Indian publication, quoted SAIL chairman C.S. Verma in a March 2011 story as saying that because of Afghanistan's high level of risk, "banks and financial institutions will not take the risk to such an exposure. The consortium will not be in a position to raise money on its own, either."

Shansab also claimed that the royalties his firm had offered the Afghan government — $800 million a year for the first five years of operation, and a total of $20 billion over 20 years — were substantially higher than those offered by the winning firms.

An internal Ministry of Mines evaluation of the bids that McClatchy obtained appeared to confirm this. The document shows that Kilo would pay from 3.5 percent to 7.5 percent of the per-ton price of iron, while SAIL would pay 5 percent of the per-ton price of steel and 6 percent of the per-ton price of iron, minus the cost of transportation to customers.

Acatco was offering to pay 20 percent of the per-ton price of steel.

Shansab also claimed that Acatco was the only bidder with a clear start date for production of steel from the mine, as the tender documents required. SAIL's production would start in eight to 12 years and Kilo, which planned to produce iron, had made no commitment to produce steel, Shansab said. Acatco said it would have begun steel production by July 2015.

Afghanistan's mineral wealth has long been seen as a potential source of income that could sustain the troubled nation after U.S.-led international forces withdraw in 2014. Afghanistan has massive bills to pay — particularly the costs of 300,000 soldiers and police that U.S.-led forces are training — but some U.S. experts believe that the country's mineral sector could generate as much as $1 trillion in revenue.

The awarding of the contracts to a state-led Indian consortium was widely seen in Kabul as a guarantee that India, the economic power in South Asia, would remain committed to Afghanistan after international forces withdraw.

Shansab said he had written three letters to Shahrani, the mines minister, detailing Acatco's concerns about the Hajigak bidding process but hadn't received a reply.

He also wrote an email Feb. 9 to J. Alexander Thier, a senior official who works on Afghanistan and Pakistan at the U.S. Agency for International Development, saying: "This is also an important example of how the natural resources of the poverty-stricken Afghan people should not be squandered — not just for the sake of the people of Afghanistan but also for U.S. policy in view of post-2014 Afghanistan."

Thier and other U.S. officials in Kabul and Washington didn't respond to McClatchy's requests for comment. A spokesman for Shahrani said the minister was not immediately available for an interview.

Ghiasi, the former deputy mines minister, said the contracts had been decided "without any transparency."

"We know that one of the ways to rescue Afghanistan and the Afghan people from poverty is to give mining contracts to foreign companies," Ghiasi said. "But it must be based on transparency."

(Stephenson and Safi are McClatchy special correspondents.)

Read more here: http://www.mcclatchydc.com/2012/02/17/139247/firm-alleges-problems-with-major.html#storylink=omni_popular#storylink=cpy
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Reply Sun 19 Feb, 2012 03:58 pm
many types of ores can only be produced by strip or open pit mining. This data has been available for at least twenty years even befoe the Taliban.
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