Dear Members
Ah, the joys of living in New York! When I first came over here to live in the early ‘90s, you knew that winter was actually going to be winter. It would be absolutely freezing for weeks on end. But crisp and dry. One day I remember that it went down to four degrees below zero – Fahrenheit. That’s -20°C! However, today (written on February 7th) it’s 37°F, tomorrow it’s forecast to be 60°F, and on Thursday we’re expecting snow. As is often said here: “Go figure!”
Anyway, moving from the cold here to somewhere else cold, I thought I might take the opportunity of revisiting Afghanistan and refreshing my memory (and, maybe, yours) about its mineral resources. And, in particular, any minor metals resources it might have. The review will, perforce, be selective, as I cannot claim a great degree of knowledge, even though I did spend some time in the area in the mid-‘80s.
In my research, I was reminded of some of the more dramatic headlines that appeared in the media back in 2014. For example, this one from NBC News: “Rare Earth: Afghanistan Sits on $1 Trillion in Minerals”. According to the NBC report, US researchers flying aerial surveys were able to determine that “Afghanistan may hold 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth elements such as lanthanum, cerium and neodymium, and lodes (sic?) of aluminum, gold, silver, zinc, mercury and lithium.”
The presence of significant deposits of copper was certainly in no doubt. Back in 2006, two Chinese state owned companies were granted a 30-year lease (with an estimated future investment of $3 billion) to develop the Mes Aynak deposits, thought to be some of the largest in the world. Because of safety concerns (and the discovery of an ancient Buddhist site), nothing has yet come of the deal. And although CNBC reported in December last year that China had been given the “all-clear” by the Taliban to mine the copper, it remains to be seen what happens. (The reserves at the Aynak, Jawhar, and Darband deposits also contain both cobalt and silver.)
In 2011, five years after the Mes Aynak deal, the rights to mine iron ore in three of the four blocks in central Afghanistan’s Hajigak region were acquired by seven Indian companies. According to The Hindu in early 2016: “They were slated to invest $10.8 billion for setting up steel and power plants, besides mining the deposit. However, in view of the security risks in wake of the withdrawal of U.S. troops, there was a go slow on the project along with a reported scale-down of investments by a recession hit industry.” No iron ore has yet been mined.
Of more interest to MMTA members, however, may be some of the other metals also mentioned in the NBC News report. According to the Afghanistan Investment Support Agency (often quoting the US Geological Survey), apart from extensive gold deposits, the country also boasts: beryllium deposits in the eastern provinces of Nangarhar and Laghman; rare earths and uranium in Helmand province; and, lithium deposits (in the form of lithium chloride in dry lake beds), located in Herat and Nimroz provinces in the west of the country and in Ghazni province in east central part of the country. And hard rock lithium deposits are to be found in the northeastern provinces of Badakhshan, Nangarhar, Uruzgan, and Nuristan.
Amongst the list of mineral areas of interest identified by the USGS in its surveys in the country between October 2009 and September 2011 were the following:
In the context of what is happening in the world of batteries and electric vehicles, perhaps one of the more interesting metals mentioned above is lithium. The initial analysis of just one area in the province of Ghazni indicated that deposits there may be as large even as those in Bolivia, which has some of the largest lithium reserves in the world. However, it remains to be seen what actually will happen with the country’s lithium reserves – if anything.
Quite fortuitously, I had the great pleasure of seeing my very good friend Ted Callahan the other day. It was especially serendipitous, as Ted (Dr Callahan) has lived for most of the last 11 years in Afghanistan and knows the country extraordinarily well. When I ask him what he thought was the greatest hurdle to mining just about any of the country’s subsurface mineral resources, he answered simply: “The absence of any rule of law.” And that I could take this as broadly or as narrowly as I saw fit – it was all the same.
As interesting illustrations of this, he mentioned two recent incidents. The first occurred last Monday at a lapis lazuli mine located in the Sar-e Sang area in Kuran Wa Munjan district (that’s in Badakhshan province). Miffed that, after four days of negotiations with the mine owner (one Qomandan Malik) – over demands for either 40% of the income of the mine on a monthly basis or that he should leave the mine – no agreement was forthcoming, the local deputy provincial shadow governor (i.e. Taliban local leader), together with 300 local militants, attacked the mine. The latest news I have is that the locals armed themselves and beat off the attack. A follow-up attack by the Taliban does not appear imminent. So, that’s an example of what can be happen if you are operating in an area where the Taliban are present.
The second was reported by Reuters this last Friday (February 10th): “Eleven years after its first big mining privatization [for cement], the Afghan government has abruptly cancelled the contract, highlighting the unpredictable nature of investing in a sector seen as crucial to the country’s economic development.” Perhaps more telling from a “rule of law” angle were the words from an Afghan official who said: “The ministry doesn’t have the mechanism for registration, it doesn’t have the mechanism for inspection.” So, on the other side of the coin, even if you do deal with the government (rather than the Taliban – somewhat anodynely termed an AOG or Armed Opposition Group), there’s absolutely no assurance that things will work out either.
Perhaps as additional words of warning, what Gerard van Bohemen, Chair of the [UN] Security Council Committee established pursuant to resolution 1988 (2011), in his letter of October 4, 2016 said are particularly illuminating: “Illegal mining remains a significant income stream for the Taliban. … [T]he Taliban remains directly involved in the sector by controlling illegal mining sites, in particular in the south and east of the country, by extorting sums from licensed Afghan mining operations and by acting as a transport facilitator for other illegally extracted natural resources.”
It would appear, therefore, to me anyway, that, at present, on a very simplistic level, you’re damned if you do, and you’re damned if you don’t do things through “official” channels in Afghanistan. Who knows, though, how long things will take to sort out.
Maybe it’s worth leaving the last words on how things are in the country to General John W. Nicholson, Commander US Forces – Afghanistan, ones that he gave before the Senate Armed Services Committee on the Situation in Afghanistan on February 9th: “The current security situation is a stalemate where the equilibrium favors the government”. Hmmm.
If over the coming months I come across anything further of interest, I shall make sure to keep you all updated. And if you want a considerably more nuanced (and in-depth) view of how things currently stand, I’d be more than happy to put you in contact with Ted – he’s the one who knows.
In the meantime, though, as always, I remain, with best wishes from New York.
Yours,
Tom Butcher, February 13th, 2017
