By Ahmad Shah Katawazai
“We are at risk of the curse of plenty, [the] curse of resources.”
— President Ashraf Ghani
Torn by four decades of war and desperate poverty, Afghanistan is believed to be sitting on one of the richest troves of minerals in the world. The value of these resources has been roughly estimated between $1-3 trillion.
Afghanistan has vast reserves of gold, platinum, silver, copper, iron, chromite, lithium, uranium, and aluminium. The country’s high-quality emeralds, rubies, sapphires, turquoise, and lapis lazuli have long charmed the gemstone market. The United States Geological Survey (USGS), through its extensive scientific research of minerals, concluded that Afghanistan may hold 60 million metric tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth elements (REEs) such as lanthanum, cerium, neodymium, and veins of aluminium, gold, silver, zinc, mercury, and lithium. According to Pentagon officials, their initial analysis at one location in Ghazni province showed the potential for lithium deposits as large as those of Bolivia, which has the world’s largest known lithium reserves. The USGS estimates the Khanneshin deposits in Helmand province will yield 1.1.-1.4 million metric tons of REEs. Some reports estimate Afghanistan REE resources are among the largest on earth.
REEs have become essential part of modern technology. They are used in cell phones, televisions, hybrid engines, computers, lasers, and batteries. U.S. Congressional findings have called REEs critical to national security. According to a Special Inspector General for Afghanistan Reconstruction (SIGAR) report, Washington has not had a unified strategy for the development of Afghanistan’s extractive industries.
Realizing the importance, critical capability and the Pentagon’s increasing dependence on Chinese REEs, U.S. President Donald Trump in July 2019 amended section 303 of the Defense Production Act of 1950, thus authorizing the domestic production capability for separation and processing of light REE’s, which are essential to national defense. Moreover, the Trump administration has commenced the Energy Resource Governance Initiative (ERGI), intended to promote mining of minerals that are in high demand. So far, the ERGI initiative includes Canada, Australia, Botswana, Peru, Argentina, Brazil, Democratic Republic of Congo, Namibia, the Philippines, and Zambia. Afghanistan could be part of the ERGI as well, from which the country could benefit economically and ensure a long-term strategic partnership with the United States.
REEs are key to the production of tank navigation systems, missile guidance systems, missile defense components, satellites, and military communications systems. Afghanistan can be part of the long-term solution to the REE supply problems. Afghanistan’s rich mineral resources, if exploited effectively, could prove to be the best substitutes for foreign aid and decrease the country’s dependence on foreign support. Better management of mineral resources could end in sustainable economic growth, paving the way for a lasting peace.
Afghanistan has long been a foreign aid-dependent country. There is one thing that can possibly shift Afghanistan’s unstable economy into a stable one and that is the proper exploitation of its mineral wealth. However, given myriad problems like hostile neighbors, ethnic divisions, insecurity, lack of proper institutions, and more importantly, the absence of necessary precautionary measures, the blessing of mineral resources could turn into a resource curse, and thereby transform the country’s military conflict into a resource conflict. If robust policies coupled with a comprehensive, realistic and long-term strategic approach are not adopted, there is a significant possibility that the same cycle of conflict and civil war experienced elsewhere will emerge in Afghanistan.
Afghanistan’s rich mineral resources, if exploited effectively, could prove to be the best substitutes for foreign aid and decrease the country’s dependence on donor countries and foreign support. These resources, if properly managed, provide an opportunity for Afghanistan to write its own story of economic success. Robust policies, strong institutional arrangements together with clear policy direction will pave the way for attracting both domestic and foreign investors. Better management of mineral resources could end in sustainable economic growth paving the way for a lasting peace.
But mining is an easily exploitable industry, which could be diverted to fund fighting. The resources themselves often give rise to violent conflicts for control. Areas where criminal and insurgent networks are strongly involved are more vulnerable to conflict. Conflicts are sparked sometimes over the mining activities. Groups are in competition to counter each other. In some instances, weaker communities have invited Taliban elements in for protection. With the arrival of ISIS in Afghanistan, the country’s mining sector is now facing a renewed threat.
Illegal mining is rampant throughout Afghanistan, with more than 2,000 such sites raising money for warlords and the insurgency. A SIGAR report found that illegal mining has costed the state up to $300 million annually since the Taliban’s collapse in 2001. Without a coherent and immediate response, the vast mineral resources in Afghanistan not only represent a lost opportunity, but a threat to the national security and the country.
For example, a big chunk of the country’s mineral wealth is currently going toward warlords, armed militias and Taliban insurgents. According to a recent Global Witness report, “the revenue going to these strongmen (warlord and mafia) and the Taliban from just one small area of Badakhshan (province) rivals the government’s declared income from the entire Afghan natural resource sector.” Mineral resources are thought to be the Taliban’s second largest source of revenue.
Fortunately, Afghanistan’s current president Ashraf Ghani, a former World Bank economist, is well aware of the value of mineral resources and the danger they pose to the country. He has spoken of the dangers of the resource curse with refreshing clarity. Shortly after assuming office, Ghani said that he will transform the Afghan economy through minerals. But little has been done regarding mineral sector so far, and mining remains untouched to greater extent.
The Afghan government faces enormous challenges from an active Taliban insurgency and the growing ISIS threat to the scourge of corruption. In all practicality, it will not be able to regain control of the thousands of illegally exploited mines in Afghanistan any time soon.
However, what could be done is the government should give high priority to regaining control of the mining sector. Bringing necessary reform immediately to the mineral laws, laying down basic infrastructure, could serve as a stepping-stone for the future exploitation of the minerals.
Perhaps for the upcoming Afghan administration this is a golden opportunity to orchestrate mineral resources-based economic strategy. With a major ally like the U.S., which is in dire need for REEs, and Afghanistan, with lavish resources, turning the security partnership into a major strategic and economic partnership is a huge opportunity. Moreover, in brokering the deal with the Taliban, protection and extraction of this vital sector should be key component of the future course of Afghanistan’s national security strategy and economy.
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