x Abu Dhabi, UAETuesday 25 July 2017

Kabul's buried treasures under scrutiny

The Pentagon has put a trillion-dollar price tag on the precious metals and minerals lying hidden in Afghanistan's landscape.

The Pentagon has put a trillion-dollar price tag on the precious metals and minerals lying hidden in Afghanistan's landscape. Hamida Ghafour reports on a resource that could change the country's fortunes. There have long been rumours of a pot of gold hiding in the barren hills of strife-torn Afghanistan, a treasure so rich it would dwarf the profits of the poppy growers and provide its people with a proper reward for all the years of suffering.

Faded reports have been waved in front of the eyes of mining executives promising lucrative profits for those brave enough to swing their pickaxe and unearth the nuggets. The land, officials promised, was littered with precious minerals and metals hiding in rich seams between the folded, ruptured rocks of Afghanistan's dramatic landscape. Reaction to such enthusiastic entreaties has, perhaps not surprisingly, been sceptical. After all, who would want to dispatch a team of vulnerable geologists to go poking about in a corrupt and violent land overrun by the Taliban.

In addition, assessments of the size of the iron, gold, copper and lithium deposits sprinkled through the Afghan earth were conducted by box-ticking Soviet officials, not experts using the latest technology. Then last week the Pentagon put a price on this hidden asset - and suddenly the world was paying serious attention. The figure chosen was a headline-grabbing US$1 trillion. On Monday, The New York Times was citing Pentagon officials who claimed that the size of the proven mineral and metal reserves Afghanistan was sitting on could well make it the most important mining centre in the world - the "Saudi Arabia of lithium" no less, according to an internal memo.

"There is stunning potential here," said Gen David Petraeus, the chief of the United States Central Command. The timing was canny. The story appeared one day before Wahidullah Shahrani, the well-regarded Afghan mines minister, travelled to New Delhi to meet his counterpart and invite Indian companies to open bids on its mines, and one week ahead of a London conference to attract foreign investors to Afghanistan.

"I'm glad it's finally getting some attention," said Mark Ward, special adviser on development to the United Nations special envoy to Afghanistan. "I hope it is a sign of bolstering international support for investing in natural resources. When we first broached it, we put a paper in front of the G8 foreign ministers a year ago in Trieste where myself and Kai Eide [the previous UN special envoy], said, 'Hey, this country has tremendous natural resources but it needs your help putting the roads and railroads in and fixing the border facilities so they can get this stuff out'."

What was the reaction? "They said, 'Interesting, interesting, we hate infrastructure'," he said, adding that donor countries were reluctant to invest in roads and railways because they are expensive, take a long time and are exposed to attack. Perhaps the $1 trillion figure would have done the trick? "We weren't clever enough to come up with that," he said with a laugh. The prospect of vast profits could also revitalise lagging support for the nine-year war by dangling the prospect of mining contracts to western countries whose governments would be pressed to contribute to the war effort if they wanted to reap the benefits.

"The Americans need good news for Afghanistan now. They have problems motivating their allies to stay," said Kurt Ranier Hengstmann, a German engineer and former adviser to the Afghan mines minister. "In the bigger picture, you must understand all developed countries have exploited what minerals and metals they have, or it is controlled by companies. In the developing world, the contracts have been taken. In violent unstable countries where you have abundant natural resources you have violence and unrest."

This could well be the game changer for Afghanistan. A $1 trillion mining industry would dwarf the export value of the narcotics trade at $3.6 billion. The country could be transformed from the rentier state it has been for the past century to a self-sustaining nation no longer dependent on foreign militaries for protection. It could provide jobs for a generation of Afghans tempted to fight for insurgency which offers lucrative money to destroy government infrastructure.

"This industry is easily worth $1 trillion, easily. The Americans are making a fuss of the lithium, but the copper is a much bigger deal because it is running out in the world. Afghanistan probably has the biggest copper mines in the world, bigger than Chile, the world market leader," said Mr Hengstmann. "We estimate the iron ore, copper deposits and downstream industries from that, such as steel, would create 500,000 jobs. In a country like Afghanistan that is huge potential."

It has been known for a long time that Afghanistan is abundant in precious minerals, metals and stones. The northern mountains of Badakshan province have been mined for lapis lazuli for 6,000 years; the intense blue stones were prized by Egypt's pharaohs who wore them as amulets. In the 17th century the artist Johannes Vermeer ground lapis into ultramarine pigment to paint his masterpieces of Dutch domestic life.

More recently, the vast Aynak copper mine, 35 kilometres south of Kabul, will help to propel China to the status of a global superpower when production begins in two years. The China Metallurgical Group is investing $2.8 billion to develop the field, which will produce 200,000 tonnes of copper a year. The agreement will include construction of a coal-fired electric power plant and a freight railway and bring revenues of $200 million a year for 30 years to the Afghan government. It is a massive sum - the national budget is only $650 million. It is believed there is much more out there based on reports by various international organisations.

Most of the existing information and estimates of known resources was produced by the Soviets. A 2007 report by the US Geological Survey said that, in addition to the Aynak mine, there were an additional 44 million tonnes of proven copper deposits elsewhere. Next week in London, the Afghans hope to attract bids for the Hajigak iron ore deposit in central Afghanistan - the largest in Asia - but there is another 2.2 million tonnes in other parts of the country.

Rubies, sapphires, marble and lithium are also abundant. Investors will be taking a risk in a country ranked as the worst on Transparency International's list of corrupt countries. The Aynak mine deal was tarnished after allegations that the Chinese bribed the Afghan mines minister at the time with about $30 million in cash. He was removed from the post. Ashraf Haidari, deputy chief of mission and political counsellor at the Afghan embassy in Washington, said: "Corruption is a symptom of a weak government. Our minister of mines is working very hard, as well as the minister of finance, to put in place accountability and management mechanisms. We have mining laws in place. And we are receiving assistance from the international community to strengthen them."

Even if the Afghans sign deals next week in London it could take up to five or 10 years for projects to get off the ground because many of the deposits are in difficult mountainous terrain with zero infrastructure. The worry is that warlords or insurgents allied to the Taliban will seek to control the resources. Afghanistan could become another Democratic Republic of Congo, where its wealth of diamonds has fuelled corruption and war. But the fact that the deposits are scattered across Afghanistan is a promising start, pointed out Michael Ross, the director of the Center for Southeast Asian Studies at the University of California, Los Angeles.

"True, resource wealth especially from oil and gemstones can sometimes trigger violence instead of ending it," he wrote on Foreign Policy magazine's website. "But this typically happens when oil wealth is concentrated in a region dominated by an ethnic minority that seeks independence, unlike Afghanistan, where minerals are scattered around the country; or if it comes in a form that can be easily looted and smuggled abroad, like diamonds. Afghanistan's resource base might be sufficiently diffuse both geographically and geologically to keep it from fuelling further conflict. And the more jobs it creates, the less fighting there should be."

For Afghans, it comes as no surprise that the Americans are interested in their natural resources. "Afghanistan is a country almost untouched and undeveloped in so many ways, so it is not a big surprise if we see more of these mines," said Barry Salaam, a political pundit in Kabul. "I believe Americans should know a lot more about our country than we possibly know. The same way the Americans love to stand at the high peaks of Pamir and watch the over-ground politics in central Asia, they shouldn't be any less interested to find out what lies underground too."