That Afghanistan is a source of valuable metals and minerals has been known for millennia. Most famously, the country was the main source for the blue precious stone lapis lazuli, exported westwards to Mesopotamia (modern Iraq), Egypt and the Aegean regions as early as the fourth millennium BC (between 5 000 and 6 000 years ago), and to India even earlier.

In those distant times, Afghanistan was also an important source of tin, essential for the manufacture of bronze, the alloy which gave its name to the Bronze Age, the first era of the great metals-based civilisations, which lasted, in the Near East and Egypt, roughly from 3 500 BC to 1 200 BC.

In more recent centuries, however, Afghanistan ceased to be a major centre for mining. Hence, the general surprise when, in 2010, it was revealed that US geologists had estimated that the Central Asian country had mineral deposits worth $1-trillion. Surveying operations by the US Geological Survey (USGS), based on geological maps and data complied by Russian geologists before and during the Soviet occupation of the country (and left in the Afghanistan Geological Survey library when the Soviets withdrew), indicated large-scale deposits of iron-ore, copper, niobium, rare-earth metals, cobalt, lithium and gold. There are also oil and gas reserves. But Afghanistan is not the easiest place in the world to build a mine.

Destruction and Reconstruction

The country has endured more than 30 years of conflict, since the then Soviet Union invaded it in December 1979. Central government authority, weak at the best of times, collapsed completely outside the major cities. Much infrastructure was destroyed. It is believed that more than one-million Afghans had lost their lives by the time the Soviet army withdrew in early 1989. In that year, 6.2-million Afghans were living as refugees in other countries. The Soviet withdrawal was not followed by peace.

The Taliban regime, which dominated most (but never all) of Afghanistan from 1996 to 2001 was actively hostile to certain modern technologies. (The reason the Russian geological maps survived is that, when the Taliban took over Kabul, the geologists at the Afghanistan Geological Survey took them out of the library and hid them in their homes.)

The Taliban also forbade women to parti-cipate in the economy. Indeed, women were only meant to leave home if fully covered and accompanied by a close male relative. Female education was banned. The damage that this did to the country can be gauged from estimates that, prior to the Taliban’s seizure of power, in Kabul, 70% of school teachers, 50% of public servants and 40% of doctors were women. At Kabul University, 60% of the lecturers and 50% of the students were women.

But, since the Taliban were overthrown in 2001, things have been improving. Last month, Indian journalist Arnab Pratim Dutta wrote in the Business Standard newspaper: “Kabul no longer resembles a city ravaged by three decades of war, civil strife and insurgency. A few minutes after leaving the airport complex, as one enters the streets of Afghanistan’s capital, all notions of the war-torn country begin to fade. Plush, yet Bohemian-styled, marriage halls (where weddings are celebrated), perhaps inspired by the casinos of Las Vegas, glitzy shopping malls and busy markets greet curious eyes. What happened to the bullet- ridden mud walls of the shell-punctured roofs, one might ask. The first impression of Kabul has none of that to offer. As the city begins to introduce itself, it becomes evident time has healed its wounds. Pul-e Khishti, Kabul’s biggest open-air market, bustles with shoppers and itinerant vendors. Kiosks selling burger and Doner kebabs have popped up next to traditional Afghan eateries. Driving with office-goers means being caught up in hours-long traffic snarls.”

The commander of the United Nations-mandated and North Atlantic Treaty Organ-isation-led International Security Assistance Force (ISAF), General Joseph F Dunford, of the US Army, stated in his (northern) autumn 2013 situation update: “Afghan National Security Forces (ANSF) proved capable of securing the Afghan people during their first fighting season in the lead. . . . During this period, they gained confidence, demonstrated cohesion and further developed their capa- bilities, thus largely limiting insurgent violence to less populated areas. In virtually all tactical engagements, the ANSF demon-strated tactical overmatch vis-a-vis the Taliban. . . . At all levels, we’ll support the ANSF in improving leadership and addressing poor literacy, corruption and attrition. . . . The Taliban-led insurgency failed to achieve its stated operational objectives during the 2013 fighting season. They were unable to contest population centres or hold large areas of terrain. Despite a concerted outreach effort to increase their influence, the number of Afghans who support the Taliban remained below 15%.” Since June 18, the ANSF have been leading all security operations in all parts of the country, with the ISAF acting in a supportive and advisory role.

“Development progress since 2001 has been mixed,” cautions the World Bank. “Key social indicators, including life expectancy and maternal mortality, have improved markedly (admittedly from an extremely low base) and women are participating more in the economy.”

A 2012 poll in Afghanistan by US-based not-for-profit development organisation the Asia Foundation found that 52% of respondents believed that their country was headed in the right direction (as against 46% in 2011). The main factors propelling this optimism were “good security” (41%), reconstruction and rebuilding (35%), the opening of girls schools (14%), an improving educational system (13%) and operations by the Afghan National Army (ANA) and the Afghan National Police (ANP) (also 13%). Public confidence in the ANA stood at 93% and in the ANP at 82%; 55% had no fear when meeting ANA troops and 51% had no fear of encountering ANP officers. However, only 39% had confidence in the local police. Overall, 74% regarded the security situation in their local areas as “quite good or very good”. Only 10% expressed “a lot of sympathy” with “armed opposition groups” and 20% “some level of sympathy”; and 63% had “no sympathy at all”.

The three biggest problems facing the country were identified as insecurity (28%), unemployment (27%) and corruption (25%). Interestingly, in the Central/Kabul, North West and North East regions of the country, unemployment was cited as the biggest problem. In the West, Central/Hazarajat and South East regions, insecurity was seen as the main problem (although unemployment came a quite close second in Central/Hazarajat).

The Asia Foundation survey also found that 53% of those surveyed reported that their families were more prosperous now than under the Taliban (31% stated they were less prosperous), although this prosperity is found more in urban than in rural areas; 42% affirmed that their household health had improved and 46% that it remained the same, while 41% reported an improved quality of life and 46% (again) that it remained the same. Provision of services had generally improved since 2007, particularly the supply of potable water.

But the country is heavily dependent on foreign aid. Dutta reported that in 2010/11, 41% of the Afghan government’s Budget – $1.2-billion – was funded by foreign aid. Total foreign aid to the country, including to international and local aid groups and charities, came to $15.7-billion. In 2011, foreign aid of some $252-million was allocated to the development of Kabul alone. According to the World Bank, between 2002 and 2010, the flow of civilian aid into Afghanistan averaged $6-billion a year, equivalent to 40% of the country’s gross domestic product (GDP). Little wonder the government wants to develop the mining sector.

Opportunities and Obstacles

Kabul is in the process of privatising mineral resources to allow foreign investment and stimulate the development of the mining industry. The Afghanistan Geological Survey initially identified six major metals and minerals opportunities in the country – copper, iron-ore, rare-earth metals lithium, niobium and tantalum, as well as gold, gemstones and marble.

Regarding copper, the agency reports that there are some 300 recorded copper deposits in the country in a number of different mineralisations. However, exploration and evaluation using modern techniques are required. The biggest and best known of these deposits, Aynak (situated some 30 km south-south-east of Kabul) was rediscovered by Russian geologists in 1974 (it had been exploited in ancient times) and is a world-class resource. Concessioned in 2007, it is composed of two main orebodies, Central Aynak and Western Aynak. With a 0.4% copper cutoff grade, the Central Aynak orebody runs 1 850 m along the strike and 1 200 m down- dip and its greatest thickness is 210 m. Using the same cutoff grade, Western Aynak’s deposit is 2 230 m along strike and 1 640 m down-dip, with maximum thickness being 214 m. The resource could be 240-million tons at a grade of 2.3% copper.

The main iron-ore deposit is Hajigak, 130 km west of Kabul. (There are also several smaller deposits in the same area.) Con-cessioned in 2011, its resource is estimated at 1.8-billion tons at 62% iron, divided up into 16 separate orebodies, which can be up to 3 km long and 100 m thick. Hajigak has been known since the mid-1960s, but is in a remote and mountainous area. On the other hand, exploration drilling has not gone deeper than 180 m, there are further deposits in the area and the Shabashak coking coal deposit is nearby, making an iron and steel industry possible.

Rear-earth metals, lithium, niobium, tantalum and other metals have been identified in pegmatites or located in sediments underneath a number of depressions and lakes. Most of the economically attractive peg-matites are located in eastern Afghanistan. These can contain lithium, niobium, tantalum or rare-earth metals. Metal-rich sediments have been found where the lake brines have contained above-average concentrations of metals. Exploration has shown that salt deposits overlain by layers of clay and loam contain significant concentrations of boron, lead, lithium and zinc. Systematic modern exploration needs to be done in these areas.

Gold is another metal that has been exploited in Afghanistan for centuries. Currently, all gold production is artisanal. The USGS has recorded 112 gold occurrences in the country, but modern exploration is required. The Afghanistan Geological Survey believes that the potential for the discovery of economically viable gold deposits in the country, especially (but not exclusively) in bimetallic copper-gold orebodies, is high. Soviet geological research, starting in the 1960s, identified a number of prospective areas.

With regard to gemstones, apart from lapis lazuli, the country possesses emeralds, rubies and sapphires, and, in the semiprecious category, aquamarines, beryls, garnets, kunzites, topazes and tourmalines. It also produces fluorite and several types of quartz. Most gemstone mining is artisanal and most gemstones are exported illegally. The four main gemstone producing areas of the country are Badakhshan (for millennia, the source of lapis lazuli), Jegdalek (rubies and sapphires), Nuristan (aquamarine, beryl, kunzite and tourmaline) and the Panjshir Valley (emeralds). Primitive mining techniques reduce the quality of the stones produced.

Afghanistan produces a wide variety of marbles from quarries in the Badakhshan, Herat, Kabul, Logar, Nangarhar and Wardak provinces. But the local industry suffers from inadequate equipment, poor quality control and high wastage.

When it comes to obstacles, modern Afghanistan has no experience of large-scale mining. In its 2011 study, ‘The Mineral Industry of Afghanistan’, the USGS noted: “Contribution of the minerals industry to GDP was insignificant. Afghanistan’s minerals industry was at a primitive artis- anal stage of development; the operations were all small-scale and output was supplied mainly to local and regional markets. The country produced cement, coal, natural gas and some industrial minerals for domestic consumption. Afghanistan exported a small amount of precious and semiprecious gemstones and imported petroleum products.”

The Al Jazeera media network, quoting local sources, has reported that 60% to 75% of mining in Afghanistan is illegal and run “in a mafialike atmosphere, led by local strongmen, commanders of armed groups and corrupt Parliamentarians”. Safety and environmental standards are usually neglected. There are, however, some legitimate, legal, local mining companies, which apply much higher standards.

There are other obstacles. For example, in 2007, a Chinese consortium (the Metallurgical Corporation of China and Jiangxi Copper Corporation) won a 30-year concession for the Aynak copper deposit for some $4.4- billion. But, five years later, no mining has taken place. It seems that neither the Ministry of Mines nor the Chinese foresaw the problems that have emerged, including landmines and the presence of ancient Buddhist sites. The issue of infrastructure also seems to have been more difficult than expected. The indications are that both sides want to renegotiate the concession contract, but in different ways for different reasons.

Meanwhile, an Indian consortium, the Afghan Iron & Steel Corporation (Afisco), led by the Steel Authority of India, won the concession for Hajigak in late 2011. The plan was to establish mines, build an 800 MW power plant and set up a 6.2-million-ton-a-year (Mt/y) steelworks, in a $10.8-billion investment that would be made in two equal phases. In August, Afisco announced that, while its ultimate objective was unchanged, Phase 1 of the project was being downscaled significantly, from a 3.2 Mt/y steel plant to a 1.2 Mt/y to 1.5 Mt/y plant. No reasons have been given and the decision was accepted without protest by the Afghan government.

Currently, the only means of transport into and out of the country are trucks and aeroplanes. The government does have ambitious plans to develop a railway network, connecting the country to its neighbours, but this has just started. Mining companies may have to build their own railways to link their operations to the national network.

But, perhaps, the biggest single concern for would-be investors in the country’s mining sector is governance. “When you go to a conference, the number one question is not security for investors – it’s the political and legal stability of the country,” economist and former Ministry of Mines director Tamim Asey told US National Public Radio in May. The country’s proposed new mining law, intended to make it more attractive for foreign investors, is stalled in Parliament. “Several companies have expressed interest in investing in the mining sector,” Afghanistan Investment Support Agency deputy head Mohammed Ibrahim Shams told Afghan TV station Tolonews in September. “But due to the delay in the new Law on Mines approval, they have not been able to start their work.” The government has agreed a number of contracts with mining companies, but these have not yet been signed, Asey reported. “They have not signed them because the minerals law has not been approved. If investors don’t see the law is passed within another six months to a year, those contracts will fall apart.”

Adding to the current uncertainty is the fact that next year sees Presidential elections, which will take place in April. Having served two terms, incumbent President Hamid Karzai is unable to run again. There are at least six serious candidates with a chance of winning. Whoever wins will have to see to the development of the country while ensuring that the exploitation of country’s natural resources does not feed corruption, factional strife and lopsided development.