Afghanistan
11:13 am
Thu March 29, 2012

Dreams Of A Mining Future On Hold In Afghanistan

Originally published on Fri May 17, 2013 5:27 pm

Afghanistan faces the daunting prospect of a drastic reduction in foreign aid, which currently makes up about 90 percent of the country's revenue. Some have seen an economic life raft in geological surveys that indicate huge deposits of copper, iron, uranium and lithium in various parts of the country. But multinational mining firms have been slow to invest in Afghanistan — not least because of questions about stability after American troops draw down.

Mullah Mira Jan, the tribal leader of Ainak village, says he was promised a job mining copper on this hillside in eastern Afghanistan — but that was about 40 years ago. Mira Jan takes out a faded ID card with a picture stapled in and points to the line for occupation.

"That was my picture when I was 14 years old," he says. "I'm listed as a day laborer." That's how long the villagers here in Ainak have been waiting for the hilltop next to their village to start producing jobs and wealth. Mira Jan now wears a long white beard and a turban. He gestures to the copper tinted hillside behind him, which he said used to be covered with trees. That was under president Daud Khan, in the mid-1970s.

"Daud was the only president we trusted, and then he was assassinated," Mira Jan says. "The Soviets invaded Afghanistan in 1979 and they kicked us out of our village, but war prevented them from ever exploiting the mine."

Now a Chinese state company, MCC, has won the copper concession here. The Afghan government has relocated residents from Ainak to make way for the development of the mine. And once again there is the promise of jobs.

But five years after MCC won the contract, there is no sign of the railroad the company pledged to build to get the copper out.

"It will obviously be built before 2014, because they have to start commercial production somewhere in 2014," says Tamim Asey, director of public affairs for the Afghan Ministry of Mines. He says that by 2014 the Chinese company will have built not one, but two railway lines, as guaranteed in the contract. But the fact is the Chinese contract has not been made public. A secret U.S. Embassy cable published by WikiLeaks quotes Chinese officials as calling the promise to build railways "flexible." Mining experts in Afghanistan are wondering what else in the contract might be flexible, says Haseeb Humayoon, a partner at QARA Consulting in Kabul.

"We're looking at at least a 10- to 15-year window," Humayoon says. "The point here is when will they actually be able to extract and turn them into revenue sources both for this country as well as for companies that invest in there."

Humayoon says the Afghan government has already auctioned off two megamines: the copper in Ainak, and a massive iron mine in central Bamiyan province. In both cases the government looked only for the highest payer of royalties, which gave an advantage to state-run consortia. The Indian and Chinese state companies that won those contracts can afford to bid well over market value, because they are securing the minerals for national strategic reasons. But Afghanistan also has a strategy, says Humayoon.

"By bringing in investors from the region such as India and China and others, you could create buy-in into the stability of this country," Humayoon says.

Having big players like India and China back the Afghan mining industry is comforting, but it's not clear that the Afghan government can enforce promises made by such big players — such as the two railroads. The Chinese Embassy in Kabul declined to comment for this story.

There is work going on. In the valley below, a huge land mine removal team is starting its work after a long winter hiatus. Nearly 700 police have moved into the tiny valley to protect the operation from the Taliban and other armed groups in the province.

Mira Jan says he's hoping the mine will be developed this time. As for saving Afghanistan's economy, he's got his doubts. Corruption, he says, is the problem — billions of dollars have come to this country, he says, and it's all disappeared.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

To Afghanistan now, which is dependent on foreign aid. Such aid makes up about 90 percent of the country's revenue. As the U.S. and others scale back in Afghanistan, the country needs an economic life raft of some kind, and one possibility lies within its own borders. Geological surveys of Afghanistan reveal huge deposits of copper, iron, uranium and lithium.

NPR's Quil Lawrence visited a start-up copper mine outside of Kabul, to see if mining could provide the boost Afghanistan needs.

QUIL LAWRENCE, BYLINE: Mullah Mira Jan, the tribal leader of Ainak Village, says he was promised a job mining copper on this hillside in eastern Afghanistan. But that was 40 years ago. Mira Jan takes out a faded ID card with a picture stapled in and points to the line for occupation.

MIRA JAN: (Foreign language spoken)

LAWRENCE: That was my picture when I was 14 years old, he says. I'm listed as a day-laborer.

That's how long the villagers here in Ainak have been waiting for the copper under the hill to bring them jobs and wealth. Mira Jan now wears a long, white beard and a turban. He gestures to the copper-tinted hillside behind him, which he said used to be covered with trees - that was under President Daud Khan in the mid 1970s.

JAN: (Foreign language spoken)

LAWRENCE: Daud was the only president we trusted, and then he was assassinated, says Mira Jan. The Soviets invaded Afghanistan in 1979, and they kicked us out of our village, he says. But war prevented them from ever exploiting the mine.

Now, a Chinese state company, MCC, has won the copper concession here. The Afghan government has relocated residents from Ainak to make way for the development of the mine, and, once again, there is the promise of jobs. But five years since MCC won the contract, there is no sign of the railroad the company pledged to build to get the copper out.

TAMIM ASEY: It will obviously be built before 2014, because they have to start commercial production somewhere in 2014.

LAWRENCE: Tamim Asey is director of public affairs for the Afghan Ministry of Mines. He says that by 2014, the Chinese company will have built not one, but two railway lines, as guaranteed in the contract. But the fact is the Chinese contract has never been made public. A secret U.S. Embassy cable published by WikiLeaks quotes Chinese officials as calling the promise to build railways flexible.

Mining experts in Afghanistan are wondering what else in the contract might be flexible, says Haseeb Humayoon, a partner at QARA Consulting in Kabul.

HASEEB HUMAYOON: We're looking at, at least a 10 to 15-year window. The point here is when will they actually be able to extract and turn them into revenues sources, for both this country as well as for companies that invest in there?

LAWRENCE: Humayoon says the Afghan government has already auctioned off two mega mines: The copper in Ainak and the massive Iron mine in central Bamiyan Province. In both cases, the government looked only for the highest payer of royalties, which gave an advantage to state-run consortiums. The Indian and Chinese state companies that won those contracts can afford to bid well over market value because they are securing the minerals for national strategic reasons. But Afghanistan also has a strategy, says Humayoon.

HUMAYOON: By bringing in investors, who, from the region, such as India and China and others, you can create buy-in into the stability of this country.

LAWRENCE: Having big players like India and China back the Afghan mining industry is comforting, but it's not clear that the Afghan government can enforce promises made by such big players, such as the two railroads. The Chinese Embassy in Kabul declined to comment for this story.

(SOUNDBITE OF CONVERSATIONS AND SHOVELING)

LAWRENCE: There is work going on. In the valley below, a huge landmine removal team is starting their work after a long winter hiatus. Nearly 700 police have moved into the tiny valley to protect the operation from the Taliban and other armed groups in the province.

JAN: (Foreign language spoken)

LAWRENCE: Mira Jan says he's hoping the mine will be developed this time. As for saving Afghanistan's economy, he's got his doubts. Corruption, he says, is the problem. Billions of dollars have come to this country, he says, and it's all disappeared. Quil Lawrence, NPR News, Kabul. Transcript provided by NPR, Copyright NPR.

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