What’s happening to Afghanistan’s natural resources – Antony Loewenstein – The Nation

Before its failed occupation of Afghanistan, the Soviet Union discovered that the country was rich in natural resources. In the 1980s, Soviet mining experts drafted maps and collected data that would lay dormant in the Afghan Geological Survey in Kabul until the rise of the Taliban. These charts documented a vast amount of iron, copper, gold, cobalt, rare earth metals, and lithium.

Fearing what the Taliban might do with this wealth, a tiny group of Afghan geologists hid the maps in their homes until the arrival of American forces in 2001. By 2007, the US Geological Survey had undertaken the most comprehensive study of the mineral deposits below the country’s surface. An internal Pentagon memo claimed that Afghanistan could develop into the “Saudi Arabia of lithium,” referring to the mineral that is an integral component of laptop and smartphone batteries.

Washington was ecstatic about the findings and in 2010 claimed that at least $1 trillion in resources was up for grabs. “There is stunning potential here,” said Gen. David Petraeus, then the head of US Central Command, speaking to The New York Times. US officials said that the deposits could sustain the Afghan economy and generate thousands of jobs, reducing corruption and reliance on foreign aid. Currently, with 60 percent of the country’s budget provided by foreign donors, outside investment is crucial. Acknowledging the inability of the Afghan Ministry of Mines and Petroleum to handle a burgeoning resource industry, the US government pledged to help implement accountability mechanisms. However, regulations like the mining law—revised in 2014 to bring greater transparency—have had little effect on illegal mining and the non-payment of royalties.

The warning signs were there. “This is a country that has no mining culture,” Jack Medlin, a geologist in the US Geological Survey’s international-affairs program, told the Times. During my visit to Afghanistan in May, I often heard from locals that the resource industry was never going to provide enough money to support the economy once foreign aid dried up. Afghan mining expert Javed Noorani told The Nation that President Ashraf Ghani is “more constrained in his actions against the criminal networks operating in the mining sector than President [Hamid] Karzai was. Today there is open plunder of gemstones by the partners in his government, and his silence and passivity puzzle me, like many others.”

Mining and Petroleum Minister Daud Shah Saba told Iranian mining officials in October that only 25 percent of Afghanistan’s mines had been identified, indicating that the US mineral survey perhaps wasn’t as comprehensive as claimed. In 2015, according to Saba, the government will earn only $30 million from resources for the third consecutive year—far less than the projected $1.5 billion. “Unfortunately, we have failed to well manage and well control our mining sector,” the minister told Bloomberg News in October. “With the current fragile and messy situation, it’s really hard to say when Afghanistan should expect any profits from it.”

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The facts on the ground explain the troubles. Logar Province hasn’t seen peace for decades. Situated close to Kabul, the country’s capital, the area was a main supply route for the American-backed mujahideen as they poured in from Pakistan in the late 1970s and early ’80s during the Soviet occupation. Swedish journalist Borge Almqvist visited the province in 1982 and commented that “the most common sight, except for ruins, are graves.”

By 1995, the Taliban controlled Logar, and today, all sides of the modern Afghan conflict intersect there. Insurgents rule large swaths of the area, and suicide bombings kill civilians and Afghan security forces. The locals are caught between the Taliban, a small but growing Islamic State (ISIS) presence, and Afghan troops.

Logar is also home to one of the world’s largest untapped copper deposits, at Mes Aynak. The Chinese company China Metallurgical Group Corp. (MCC) controls the $3 billion mine, having obtained rights to the area in 2007, but operations haven’t commenced because of security concerns and the discovery by archaeologists of ancient Buddhist relics dating back to the Bronze Age.

Local and international archaeologists have spent years finding, cleaning, and preserving the relics, and they remain opposed to the mine. Nor do they have much faith that the security situation would allow the mine to operate successfully. One Afghan archaeologist working at the site, Aziz Wafa, told Reuters in April that “for the Chinese [violence] is a problem, but not for the Afghans. I was born in a war, I grew up in a war, and I will die in a war.”

When Ghani visited Beijing in October 2014, he was asked by the Chinese government to cut the royalty rate from 19.5 percent to roughly 10 percent, which would cost the Afghan government an estimated $114 million annually. Chinese frustrations with the project, especially regarding the lack of security, were behind the demands.

MCC purchased the rights to the copper for 30 years, and the Afghan government has few if any other companies willing to take over the contract in such a volatile region. Global copper prices have dropped 40 percent since 2011; there’s no reliable transportation route for taking the metal out of the landlocked country; and MCC withdrew its workers from the site in 2014. The firm claims that tens of thousands of jobs could be indirectly created if operations commenced. MCC refused my requests for comment.

Logar Province is dangerous, unfriendly to outsiders, and only marginally safe to visit before the afternoon fades into night. I drove there in May with Noorani—who is also a founding member of the Natural Resources Monitoring Network, a grassroots group dedicated to assisting mining-affected communities across the country—and the American filmmaker Thor Neureiter. The journey from Kabul took us over paved roads and past lonely gas stations, chicken sellers, men in salwar kameez and beanies, and many burqa-clad women. Closer to Davo, a village near Aynak, the landscape became lush, with vast green fields, mud houses, and a skyline hazy from heat.

On the ground in Logar Province, civilians are angry, frustrated, and scared. Mohammed Nazir Muslimyar told me that “life is no longer normal here because of the mine. There’s too much hardship. There are engineers in this community who are doing very low-level jobs.” The advertised benefits of Afghanistan’s mining boom had not reached Davo.

I arrived at a mud compound as American helicopters flew overhead and was quickly ushered into an open room with red rugs on the floor. Ten men with long beards, white turbans, salwar kameez, and brown waistcoats were waiting to share their stories, and chief elder Malik Mullah Mirjan said our presence could result in the insurgents intimidating them after we’d left. Over piping-hot tea and biscuits, Mirjan told me that the Chinese had confiscated his family’s property and never paid compensation or explained what they were doing. There was an information vacuum filled with rumors spread by scared locals, corrupt officials, and the Taliban.

“People have been displaced, and there’s been no incentive or employment offered to local people,” Mirjan said. “When the roads are built for the mine, water in the area will be affected. When extraction begins, it will get more polluted under the ground, in the air and the soil. There’s been no good intention on the part of the government and the company. If there were, the small village where I come from would have had some peace over the last five years. We feel like we’ve been invaded.”

Mirjan explained that the police we saw stationed near his home “were to protect the company, not us. They will never come to defend us.” The Taliban attacked these forces almost daily. Meanwhile, the police insulted and beat up the local shepherds, who weren’t allowed to graze their sheep around the mine site. Mirjan and some other elders weren’t absolutely opposed to the MCC’s mine; they would accept its presence if the revenues were spent on developing the local infrastructure, including dams, canals, and electrical service. “We want to turn this into a sustainable economy,” he said. “If the mining elite spend the money on building villas in Kabul, it’s not going to be any benefit to us.”

Despite years of protest by civil-society activists and international NGOs, the contract between the MCC and the Afghan government was never released publicly. Finally, Kabul posted the contract online this year with very little fanfare. The document proposed only lax environmental protections as well as a feasibility study that was never undertaken. According to public comments by Saba, the MCC didn’t consider the social costs of its proposed operations (although the Afghan government was also neglecting its responsibilities when it signed the deal).

During my visit to the country in May, Saba refused to speak to me about his ministry’s work, despite repeated requests for an interview. The Ghani administration was just as secretive and as unaccountable as its predecessor under Karzai. After trying for weeks to obtain an interview with Saba, I spoke to his chief of staff, Shafiqullah Shahrani, who repeatedly assured me that the Aynak mine would go forward and that the local residents were being consulted about how it might benefit them. When I informed him that I had just visited the area and been told the exact opposite, he defended his government’s commitment to raising revenue.

President Obama’s recent announcement of an indefinite continuation of US military presence in the country—9,800 soldiers, plus tens of thousands of private contractors—will result in no meaningful change to this reality. In fact, it may even worsen the insurgency with the expansion of militias under the Afghan Local Police, as such groups have become notorious for heinous abuses across the state. Village elders in Logar Province have said that their livelihoods are increasingly threatened around the Aynak mine because of these lawless militias. In Davo, Mirjan said that the international community—especially the United States—has spent over $100 billion in Afghanistan since 2001 and that “it was stolen. Very little of it came to the people.”

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In April, the Special Inspector General for Afghanistan Reconstruction (SIGAR), a US government body, released a report noting that Washington “did not have a unified strategy for the development of Afghanistan’s extractive industries.” Since 2009, the US Agency for International Development (USAID) and the Defense Department’s Task Force for Business and Stability Operations (TFBSO) have provided $488 million toward the nation’s extractive industries, supporting a variety of corporations like the accounting firm PriceWaterhouseCoopers and the US-based contractors Expertech Solutions and Hickory Ground Solutions.

This money, SIGAR explained, did nothing to build a viable and well-regulated mining industry in Afghanistan. Instead, the Ministry of Mines and Petroleum lacked “the technical capacity to research, award, and manage new contracts without external support,” while the US government—including USAID and the Defense Department—had failed in its mission to help create “self-sustaining Afghan extractive industries,” which “still seems a very distant goal.”

Take one project central to US government strategy: the Sheberghan-Mazar pipeline in northern Afghanistan. Originally built by the Soviet Union, the pipeline is just one example of how US resource strategies—in this case, to help Afghan engineers repair and maintain aging and damaged equipment—led nowhere. SIGAR found in 2014 that rampant corrosion had left the pipeline in poor shape, and the $33.7 million invested by the US government between 2011 and 2014 had not contributed to its stability. A SIGAR official told The Nationthat this project was now viewed by USAID and the State Department as a “liability…due to safety concerns, lack of sustainability, and other problems.”

The SIGAR official pointed out that the “development of mineral resources is a long-term endeavor and not a quick fix for Afghanistan’s budgetary challenges…. Unfortunately, US assistance in this area does not appear to have [made] much of a difference, and the sector shows virtually no signs of measurably improving in the immediate future.” The SIGAR official also admitted that the Defense Department had offered no response to the April audit and that USAID had “not yet implemented any of [our] recommendations.”

Illegal mining is also rampant throughout Afghanistan, with more than 2,000 such sites raising money for warlords and the insurgency. Historically, Pakistan has been a major recipient of these illicitly obtained minerals. A SIGAR report found that illegal mining has been costing the state up to $300 million annually since the Taliban’s collapse in 2001. Insecurity in eastern Nangarhar Province and elsewhere prompted Saba to warn Afghan lawmakers in 2015 that monitoring the thousands of mines around the country was impossible and that the complete and unrestrained looting of local resources could happen in the absence of a peace deal with the Taliban.

A senior source at the US embassy in Kabul, who requested anonymity because he was not authorized to speak to the media, told me that mineral revenues today were barely enough to support the operations of the mining ministry itself. He claimed that although Ghani now recognizes that natural resources won’t resolve the country’s budgetary problems, no alternative solutions have been proposed. “China is absolutely waiting in the wings, with many transport corridors and investment options [contingent on] improved Afghan security,” he explained. “They take a longer view and will be players in time, but for now they’ve been burned over copper [at Aynak], so they’ve stepped back.”

Yet mining remains a key plank of the Ghani administration’s economic plans as international aid dwindles. Stephen Carter, the Afghanistan campaign leader at Global Witness, told The Nation that after meeting with Ghani this year in Kabul, he sensed a new “sensible, strategic approach from the government—they have said they do not want to do any large-scale mining” (Aynak is the major exception), “and even small-scale is doubtful until they get stronger oversight and management capacity.” But, Carter added, “the government will inevitably be judged on actions, not words, and the next six months will be crucial. If there is not progress in substantive reforms in this time frame, it will be very worrying.” Six months after those comments were made, the signs are ominous: There is no evidence that the Ghani government is willing or able to eradicate the massive mineral theft by the Taliban or to institute a regulated resource sector.

Whether Afghanistan should actively pursue a mining industry or ignore its vast mineral wealth is a contentious issue. Pajhwok Afghan News journalist Ahmad Zia Rahimzai told me in Kabul that “many Afghans believe that our resources should stay in the ground until laws and accountability in the country are stronger.” Arguably, the risks incurred by leaving resources in the ground are both fewer and less severe than those posed by rampant exploitation. Noorani has argued that the Ghani administration should “leave the resources underground” because warlords control today’s industry. Indeed, minerals are the Taliban’s second major source of funds, after narcotics.

Global Witness’s Carter concurs, arguing that only in the long term should the country pursue mining: “It is too important a source of revenue and growth to ignore, given the desperate need, [but] be ready not to mine for however long it takes to put in place the right structures.” At this point, Afghanistan is years away from such a resolution.

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The hazards posed by climate change and environmental degradation appear nowhere in the US government’s assessments of the Afghan resource industry. Mining without environmental safeguards guarantees worsening air and water pollution. Countless residents of Kabul visit hospitals every day because of health complications caused by poor air quality. Open sewers and the burning of dung only add to the problem. The illegal and uncontrolled extraction of coal happens daily across the city. In addition to low-quality fuel, Afghanistan is already suffering seasonal shifts in its rain and snowfall, and many farmers complain of declining agricultural yields due to climate change. A huge mining industry in vulnerable parts of the country would only exacerbate these issues.

Carter pointed to the increasingly international initiative to leave resources in the ground to reduce global temperatures. “Afghanistan should be first in line for compensation in return for nonexploitation,” he said, “which might also provide a chance to get the money out of the hands” of local warlords.

President Obama, during his announcement in October of an extended US military presence in Afghanistan, claimed that US troops “could take great pride in the progress that they helped achieve.” He was against fighting an “endless war,” he said. But that’s exactly what Afghanistan has become: the longest war in American history. In terms of civilian casualties, 2014 was the deadliest year for the people of Afghanistan since the United Nations started compiling figures in 2009. Today, nobody is seriously talking about a viable resource industry funding the country’s future. Indefinite occupation is the preferred solution.

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