Afghanistan's New Revenue Stream

 

"Small and big Taliban commanders were coming to my office and asking, ‘How can I get a mine?’"

"I was asking them, ‘Do you have any experience in mining?’ ‘I don’t.’"

"Do you have a partner?’ ‘I don’t.’ ‘Do you have money?’ ‘I don’t.’"

Rahimullah Samandar, former chief executive, Afghanistan Chamber of Industries and Mines

 

"When the people of Afghanistan are facing poverty and unemployment, it’s needed that we tap our natural resources."

"We welcome investment from foreign countries in the mining sector."

Muhail Shaheen, head of the Taliban’s political office in Doha

 

"Afghanistan is likely to be looking at trying to maximize the revenue and not only maximize it but get it as soon as possible."

"So they’re liable to look the other way, which is going to come back and bite them."

"If they’re really going to make money in the long run, they need to do it on a much bigger and more professional scale."

David Chambers, founder of the Center for Science in Public Participation

"[Afghanistan is] an important partner."

"China encourages Chinese companies to invest and start businesses in Afghanistan . . . [and] supports Afghanistan in making full use of its natural endowment of rich mineral resources."

Chinese Ministry of Foreign Affairs 

Provincial officials inspecting an emerald at auction in Bazarak, capital of Panjshir Province. Elise Blanchard/The New York Times

Rich in minerals; copper, gold, zinc, chromite, cobalt, lithium, industrial minerals and precious and semi-precious gemstones such as emeralds, rubies, sapphires, garnets and lapis lazuili, Afghanistan is seriously exploring all avenues to enrich itself through mining investments primarily from countries like China, Iran and Russia. In the past four years agreements have been signed with scores of investors. The country's feeble economy is badly in need of income, and exploiting its natural resources appears the economic remedy to its need for operating funds.

 

In Afghanistan investments, China has become the primary investor with Russian and Iranians close behind, signing mining licenses. Rare earth elements, according to the Office of the Special Inspector General for Afghanistan Reconstruction (U.S.), are also there in abundance; altogether its resources have been valued to at least $1trillion in mining resources. Rare earth elements sought after by both the United States and China for their use in mobile phones, laptops and electric vehicles.

 

During its 20-year occupation of Afghanistan, fighting the Taliban and al-Qaeda, the U.S. government shed close to a billion dollars in developing mining projects in the country.  According to the special inspector general, a U.S. agency, however, "tangible progress was negligible and not sustained". Much of which was due to a lack of security, poor infrastructure and endemic corruption. In the wake of the U.S./NATO withdrawal from Afghanistan and the loss of aid  funding, the Taliban are desperate for a revenue stream.

 

The U.S. provided about $143 billion for development and humanitarian assistance to Afghanistan, which supported the U.S.-aligned government of the day. Even with the Taliban now governing the country, the U.S. provided $2.6 billion in development and humanitarian aid. Over the past two years, according to the World Bank, the Afghan economy shrank by 26 percent thanks to a sharp decline in international aid leaving the country "without any internal engines of growth".

An old four-story building on a busy commercial street in Kabul serves as a gemstone market, housing dozens of cell-like shops.  The New York Times

Opium production which funded the Taliban while it was attacking NATO and U.S. troops during the occupation, has now been banned. With farmers no longer growing poppies for the opium trade, the country has experienced a loss of 8 percent of its gross domestic product since land under poppy cultivation was reduced by 95 percent. Now Afghan authorities have placed their hope in mining as a replacement for poppies as a steady revenue stream.

 

Uzbek companies have agreements to extract oil in northern Afghanistan, while Turkey, Qatar, China and Iran have placed their investments in iron, copper, gold and cement mines. The government issued 560 emerald licenses in Panjshir Province, with licenses granted as well to mine rubies in Panjshir and Kabul provinces. 

 

Many existing mines are hampered by poor infrastructure and a dire lack of experienced engineers and technical experts. Similar to the situation that prevailed in Saudi Arabia when it first began extracting oil from its vast resources, when it was Western knowledge, experience, and technicians who pumped and refined the oil and retained most of the profits. Hamayoon Afghan of the Ministry of Mines and Petroleum sees to it that foreign investors are obliged to employ and train Afghans. 

 

An Afghan man holds a small piece of gold, prospected from the site of a proposed Qara Zaghan mine.    Benjamin Lowy/Getty Images

Taxes from the sales at auction of emeralds are already being collected. Previously, warlords and politically connected dealers dominated the emerald trade, and tax collection was far from government-organized. Now, however, the Taliban government with its weekly emerald auctions controls and taxes all sales. 

"The government needs the money to develop the country [so I don't mind paying the tax]."

"The question is: Will they spend it on helping the Afghan people?"

Rahmatullah Sharifi, gemstone dealer

The New York Times