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Afghanistan Moves Quickly to Tap Newfound Mineral Reserves.

Issued at 2010-06-18



The Ministry of Mines announced Thursday that it would take the first steps toward opening the country’s reserves to international investors at a meeting next week in London even as Afghans expressed a mixture of hope and doubt about the government’s commitment to develop the country’s newly documented mineral wealth.

The focus of the meeting will be the Hajigak area of Bamian Province, which has major iron ore deposits, the Mines Minister, Wahidullah Shahrani, said at a news conference here.

It was Mr. Shahrani’s first public appearance since news that the country had at least $1 trillion in untapped mineral resources became public after an article appeared Monday in The New York Times that detailed findings of the Pentagon and United States Geological Survey. Afghan officials described the $1 trillion estimate conservative and said their estimates suggested the reserves could be worth as much as $3 trillion.

“This good news has the potential of adding a lot of value to the economy of Afghanistan and it will serve the development of Afghanistan,” Mr. Shahrani said.

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

Two hundred mining investors from around the world have been invited to next week’s meeting in London where they will offer suggestions for how to develop the iron ore deposits at Hajigak, said Craig Andrews, the principal mining specialist for Afghanistan for the Word Bank.

Then, the ministry will develop a tender offer for that area. For instance, it is possible that the government would require that the bidder develop both a steel plant and the iron ore mine since there are also nearly deposits of coal, Mr. Andrews said. By September, the government hopes to be able to solicit expressions of interest from mining companies and perhaps by December narrow the number to five or six companies who have the capacity to undertake such a large the project.

Non-governmental western mining experts will be helping the ministry develop the bidding process, said Mr. Andrews. Mr. Shahrani pledged to make the bidding and contracting of mining rights as transparent as possible in order to reduce the possibility of corruption. He said the ministry would post contracts on its Web and would try to brief reporters, and by extension the public. Copies of the contracts would be made available to members of Parliament and to members of civil society.

Mr. Shahrani and his advisers cautioned against overly high expectations, underscoring that development takes years and that there are many obstacles to overcome not least of all the lack of security in some of the areas with the most minerals and the lack of a transportation infrastructure.

In Kabul, students and shopkeepers alike said they thought the government had the capability to develop mines eventually, but not without help from foreigners.

“The current government does not have the ability to launch such big projects — neither administratively, nor in terms of security,” said Ghulam Hazrat, a shopkeeper who sells spare parts for cars.

Mr. Hazrat held up his right index finger, which was disfigured when he fought the Russians in the 1980s; he pointed to two scars on his leg and one on his chest from the early 1990s when warlords were fighting each other to control the country.

“Thousands have made sacrifices like me in their lifetime. But I am sure I won’t see any benefits from such mines in my life and neither will you in yours. Whether my children will , I don’t know.”

An adviser to the minister, Abdul Rahman Ashraf, struck a similar note when asked by a young reporter at the news conference whether his generation would see the benefit of the mineral reserves. “Your generation should not think that this $3 trillion is an amount you can spend, but, your children, your grandchildren, your great-grandchildren will have the right for this reserves,” he said.

“We need to learn how to use it.”

Faisal Farooqi, a first-year student at Kabul University, studying law and political science, was more optimistic and he said he saw the reserves and the international attention to them as something the country needs to take advantage of.

“It is time we show the will,” to take advantage of such wealth, he said. “It is an opportunity for us to get out of this misery and we should grab it with both hands — even if our hands are shaky.”


Source: The New Yor Times



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