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Managing Afghanistan's Mineral Hopes

Interviewees: Wahidullah Shahrani, Minister of Mines, Islamic Republic of Afghanistan
Craig Andrews, Lead Mining Specialist, World Bank
Michael Stanley, Mining Specialist, World Bank
Interviewer: Greg Bruno, Staff Writer, CFR.org
June 29, 2010

When the New York Times reported on June 13 that Afghanistan sits on as much as $1 trillion of mineral wealth, Washington and Kabul buzzed with qualified excitement about Afghan potential; amid a near-constant cacophony of negative headlines, here was something positive. In the weeks that have followed, a sense of cautious optimism has emerged among government officials, coalition partners, and international scientists looking to chart the most effective--and realistic--path toward Afghanistan's economic independence.

Afghans have wasted little time in seeking to lure new international mining investors--beyond the well-publicized Chinese investment in the Aynak copper deposit in Logar province. Afghanistan's minister of mines, Wahidullah Shahrani, was in London last week to woo investment in another field--the Hajigak iron ore deposit west of Kabul. In a telephone interview with CFR.org, Shahrani said the "enormous" potential for developing his country's mineral sector is a "unique opportunity" in his country's history. He said Afghan scientists put the country's total mineral wealth at $3 trillion--three times American and international estimates. Yet Shahrani acknowledged the need for government reforms and increased transparency in contracting to encourage increased investment by global firms. He also said Afghanistan must invest heavily in roads, railways, and other infrastructure to convince international companies to set up shop.

International mining experts are more nuanced in their optimism. Craig Andrews and Michael Stanley, mining experts at the World Bank who have worked extensively with the Afghan mining ministry, say the buzz created by the New York Times article misses the fact that Afghans have been studying their natural resources for decades. "To go so far as to suggest that the United States has discovered deposits might be a little bit too far, and also not give justice to work that other geological survey organizations have done over the years," says Andrews. Andrews also says that while mineral wealth could one day rescue Afghanistan's underperforming economy, it's too early to be counting dollar signs. "Mineral occurrences are not money in the bank," he says.

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