Blood for minerals? The US returns to Afghanistan in search of mining profits

Blood for minerals? The US returns to Afghanistan in search of mining profits

An Afghan businessman checks lapis lazuli gemstones at his shop in the city of Kabul, Afghanistan, in March 2016. The brilliant blue stone is a key part of the extensive mineral wealth that is seen as the best hope for funding development of one of the world’s poorest nations.

(AP/Rahmat Gul)

Afghanistan’s mining sector is abuzz with news about US President Donald Trump’s reported interest in its enormous mineral wealth. But how much of that wealth will trickle down to the Afghan people – and at what cost?

Talk about Afghan minerals coincides with Trump’s decision to send thousands more troops to prop up a government that has lost control of more than 40 per cent of the country to insurgent groups that make millions from mining.

Afghanistan’s south-eastern Logar province, where the Taliban launched an offensive in August, is home to one of the largest copper deposits in the world. Afghan officials are optimistic the Mes Aynak copper deposits less than 80 kilometres away from the capital city of Kabul, if extracted properly, can change the fortunes of this war-torn country.

Mohammad Nazir Mushfiq is director of the region’s petroleum and mines. He tells Equal Times: “We would warmly welcome whoever is interested and willing to invest in the mining sector in our country.”

He adds that American investment in this sector could play a key role in lifting the country from poverty and boosting its economy. The newly appointed minister of mines and petroleum, Nargis Nehan, has also raised hopes that the Afghan government might reform and clean up the sector.

Policy pirouette

In a clear deviation from his election campaign calls for a pull-out, Trump announced in August that he would increase US boots on the ground. After a long and extensive policy review, the president accepted the Pentagon’s proposal to deploy about 4,000 more US soldiers to join the 8,500 US service members currently deployed in Afghanistan.

The move comes despite domestic US opposition to involvement in a conflict that has killed more than 2,000 US military personnel and over 150,000 Afghans since it began in 2001.

“From now on, victory will have a clear definition: attacking our enemies, obliterating Isis, crushing al-Qaeda, preventing the Taliban from taking over the country, and stopping mass terror attacks against Americans before they emerge,” Trump said during a speech he gave in Arlington, Virginia on 22 August 2017.

The estimated US$1 trillion worth of minerals buried in Afghanistan are seen as a major factor in the decision. Afghanistan’s economist-turned-President Mohammad Ashraf Ghani, who has long pushed for the development of his country’s mineral deposits, reportedly pitched the idea to his US counterpart in February.

Ghani, a former World Bank economist, invited Trump to explore the huge reserves of minerals that would help meet the costs of America’s longest war and boost economic growth for both countries.

China is also a competitor for minerals in Afghanistan. In a heavily guarded government compound in Logar, Mushfiq informs Equal Times that insecurity and illegal extraction of mines remain top concerns.

“Particularly in areas under the influence of the armed rebels [Taliban and pro-ISIS militants] where the government’s writ is literally non-existent, illegal and rampant extraction [of minerals] is under way in a very unprofessional way that is also damaging the reserves,” he says.

He adds that the bulk of illegally extracted minerals are smuggled across the border. To assess the overall situation, the White House is reported to be considering sending an envoy to Afghanistan to meet with mining officials.

Media reports suggest that three of Trump’s senior aides have met with a chemical executive, Michael Silver, to discuss the potential for extracting rare-earth minerals in Afghanistan. Silver’s firm, American Elements, specialises in these minerals, which are used in a range of high-tech products.

Buried treasure

War-ravaged Afghanistan has rich deposits of rare earth metals, iron, copper, cobalt and gold. An internal Pentagon memo states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and smartphones.

Dr. Siegfried O. Wolf, director of research at the South Asia Democratic Forum, says that US interest in those deposits is not surprising. “However, the situation in Afghanistan is far too complex to narrow Washington’s interests down to the exploitation of minerals,” he says.

He acknowledges that the development of the mining sector could help to boost the country’s economy and would create funds for reconstruction, if done differently than in the past.

“Due to the instable security situation, corruption, and a lack of transparency, only a small elite were able to profit. As a consequence, until now the common Afghan people have not benefitted much from the vast mineral wealth of their country”.

In 2008, the Afghan government awarded the Mes Aynak mining contract to the Chinese state-owned firm MJAM-MCC, but work on the ground remains suspended due to the risk posed to the 5th century Buddhist monasteries, fortress and evidence of even older Bronze Age settlements buried beneath the rubble of ancient copper mines.

Analysts say the US firms hoping to capitalise on Afghanistan’s untapped mineral wealth would not have an easier ride. “Until now, China with its financially well-equipped state-own companies has been able to outbid all kind of western competition, but it did not invest much in the general socio-economic development of Afghanistan,” Wolf says.

The Kabul government’s ability to maintain control over the mines and smuggling routes is also crucial if the welfare of its citizens is to see any improvement.

During its annual anti-corruption campaign this year, the European Union Mission in Afghanistan called illegal mining the second-largest source of income for Taliban, only second to narcotics.

Mohammad Akram, a former director at the Ministry of Mines and Petroleum, also agrees that the government does not have control over many rich deposits of minerals in restive parts of the country.

“Even the legal mining is not done properly. For example, the ratio of waste in most of the coal mines across the country is 40 per cent due to unskilled workers and lack of modern tools or technology,” he says.

He also underlined the dangers posed to the miners’ lives due to a lack of safety measures, and welcomed the prospect of new US investment – with caution. “We need to make sure all mines are well-mapped and auctioned on transparent, balanced and binding terms that protect the interests not only of the investor but the people of Afghanistan.”