Afghan minister pins hopes on developing $3 trillion minerals industry

Dubai: After four decades of war, Afghanistan seems finally ready to prepare for a life after conflict. With a crippled economy that is still almost entirely reliant on aid, President Ashraf Ghani has embarked on a set of ambitious reforms to wean Afghanistan off international assistance since taking office in 2014.

For a country that exports just $878 million of goods a year — mostly made up of opium, fruit and insect resins — Afghanistan is increasingly preoccupied with what lies in the mines deep beneath its blood-soaked soil. According to Nargis Nehan, the Minister for Mines and Petroleum, the country’s people — of whom more than half live below the poverty line — are pinning their hopes on Afghanistan’s abundant natural resources, which she values at potentially more than $3 trillion (Dh11.01 trillion).

“The value addition that comes in the process of mining, and using the final product, that can take us much further,” she told Gulf News. “And I’m hoping [it’s worth] more than $3 trillion.”

An awakening of the mining industry will have a cascading effect, creating jobs, replenishing state coffers and boosting trade exports. As such, natural resources — of which the country has copper, gold, lithium, talc, iron ore, and marble — are seen as crucial to rebuilding a functioning economy.

But to take advantage, the minister said it was vital to restore investor confidence and modernise the way the government treated resources. “It’s important for us to make sure that we have a transparent, strong, and accountable legal framework in place for the sector,” Nehan said. “We’ve addressed all of the legacy issues.”

Ghani’s administration also went a step further, reforming the mining and petroleum ministry, long considered one of the most notoriously corrupt public offices in Afghanistan. To tackle this, Nehan said that she had led a ministry-wide crackdown on graft. Many of the new anti-corruption principles have since been enshrined into law.

“We have 15 provisions in the new minerals law that promote and ensure transparency and accountability, and fight corruption,” she said.

No mining contract is valid until it is made publicly available, while beneficial ownership must be published online for all to see. Politically-exposed persons are not allowed to participate in the industry or win mining rights, Nehan added.

One such person might be Erik Prince. The founder of private military firm Blackwater, Prince has privately expressed an interest in entering the Afghan minerals industry, according to the New York Times.

Blackwater gained infamy in 2007 following the Nisour Square massacre, in which 17 Iraqi civilians were gunned down by mercenaries working for the company, in what prosecutors called a wartime atrocity.

Asked if she thought the association of Prince with Afghanistan’s minerals industry was potentially damaging, Nehan said that reports of his involvement were causing a lot of “anxiety” among Afghans.

“Afghanistan, after four decades of war, is very complicated. We have an issue with trust and many people already believe that the reason we have been at war is because of our natural resources.”

The official welcomed international investors to bid for mining rights via the ministry’s official channels, but warned against foreigners lobbying secretively. “Come and participate — we will fully collaborate with [international firms]. But going and lobbying, and linking mines — which we think is the only thing God has given us — with war, has created very high anxiety among the public.”

The Taliban curse still hangs heavy

Experts say the Taliban pose yet another hurdle to the minerals industry. The group controls swathes of land throughout the country, and have been accused of illegal mining to fund their war efforts.

In March, extended peace talks between the Taliban and the US broke down without a deal, but with both sides expressing cautious optimism that a ceasefire was achievable.

When asked about what a peace deal would mean for the mines currently under Taliban control, Nehan was circumspect. “The border management and customs are more important,” she said.

“Because even if you extract [resources] from the mines, you need to export them to other countries. If we had stronger customs, it would mean they wouldn’t be able to smuggle the resources out.”

Nehan also appeared keen to downplay the scale at which the Taliban were generating revenues by plundering the country’s resources. “This whole Taliban engagement in the mining sector is glorified too much. They are engaged… but not that engaged.”