Afghanistan being a landlocked country has huge strategic importance followed by immense mineral deposits. It is estimated that it has untapped resources worth of 1 to 3 billion USD. These resources include Oil, Gas, Lithium, Copper, Coal, Gold, Cobalt, Rare Earth Minerals, Aluminum, Uranium, Zinc, Iron Ore, Timber, Chromite, Marble, Limestone, Sandstone, Barite, Sulphur, Gypsum, and Nickel. The states equipped with technology have opportunities to harvest these resources in the presence of myriad of challanges. Once tapped, these resources can alter the fate of war torn and poverty stricken Afghanistan.
The United States Geological Survey (USGS) estimates that Afghanistan may have 60 million metric tonnes of Copper, 2.2 billion tonnes of Iron Core, and 1.4 million tonnes of rare earth minerals despite huge deposits of other resources.
Lithium is one of the most important resources that is found abundantly in Afghanistan that is mostly deposited in Noristan, Kunar, and Badakhshan. Owing to the presence of huge Lithium deposits Pentagon calls Afghanistan the Saudi Arabia of Lithium. The current century is postured as the century of Lithium owing to its immense use in electric vehicles, smart phones, and laptops. Hence, its demand is increasing with every passing day and Afghanistan could be a new destination for Lithium trade that could rival Bolavia.
Apart from Lithium, Afghanistan is home to huge deposits of Copper. The biggest Copper company of Asia the China Metallurgical Group Corporation (MCC) signed 30 years lease of Mes Aynak Copper mine in Logar in 2008 with an estimated cost of 3 billion USD. Moreover, the Hajigak (which is called the Jewel of Afghanistan because of high quality of ore in the area) mine near Kabul is the biggest Iron Ore deposits in the region which has around 2.2 billion tonnes of Iron.
A Chinese company is also investing 49 million dollars in the oil sector. In 2023 China signed a 25 year contract to invest 150 million dollars by the first year and 540 million dollars by 2026 in oil sector.
The BBC reports that India, America, and China showed interest in investing in mines and minerals sector of Afghanistan in 2021. India wanted to spend 11 billion on extraction and spent 3 billion USD but stopped investment after the fall of Ashraf Ghani government. The Special Inspector General for Afghanistan Reconstruction (SIGAR) in a report of 2016 reported that since 2009 America poured 500 million USD into efforts to clean up Afghanistan's extractive industries, but the efforts witnessed limited progress. In its January 2023 report the SIGAR wrote that the US programs did not achieve their goals in Afghanistan's extraction industry.
On August 30, 2023 the Taliban signed 7 contracts for mining worth 6.5 billion USD with the companies of China, Iran, Turkey, and Britain. For instance, in the extraction of Gold in Takhar, Taliban will have 65 percent share for 5 years. While Taliban will have 13 percent share for 30 years in the Iron Ore production in Herat.
Afghanistan is a dependent country on foreign aid which has no money, lacks infrastructure and technology to extract these resources.Al-Jazeera writes that it needs at least repeated 7 to 10 years to develop large scale mining to become a major source of revenue. These opportunities can be harvested with the help of foreign countries which will be a win-win situation for all. Most importantly,China that is world leader in mining and rare earth minerals can revolutionize this sector of Afghanistan.
Extraction of these resources faces gigantic challenges in which corruption is pertinent. As per a report of CNN Business on August 19, 2021, Afghanistan generates revenue of around 1 billion USD annually in which 30 to 40 percent has been siphoned off by corruption, warlords, and the Taliban.
Another challenge is security which has been the biggest concern of the investors. When the Taliban were not in power they posed a huge threat to investors and took ransom whereas at present Daesh has been a huge threat to investors in the state.
Apart from security concerns political uncertainty is a big challange. Afghanistan has been in the clinches of political uncertainty after the fall of King Zahir Shah in 1973. This uncertainty has been a venom for investment in the country.
Geopolitical challenge is another impediment in investing in mines and mineral sector of Afghanistan. Since the USSR invasion of Afghanistan in 1979, Afghanistan has been a playground of regional and international proxies which have paused its economic development, has caused political instability, and has thrown Afghanistan into chaos and anarchy and tug of war.
Lack of documentation of this sector is another challenge that has hampered its extraction. Illegal mining in the country is at its peak. As per the diplomat report of 2020 which wrote that there were 2000 sites of illegal mining in Afghanistan generating money for warlords and the insurgency. While the SIGAR reports that losses due to illegal mining to the state economy in 2023 was worth 300 million dollar annually since 2001.
Afghanistan is a dependent country on foreign aid where the major source of income has been opium which labels it as
opium economy. It is a country where agriculture is rare and food insecurity is high. It is a country where poverty, inflation, education decline, fragile healthcare sector, and hunger have devestated the lives of its citizens.Exploitation of mineral wealth can pull out Afghanistan from economic dependence. Technologically advanced countries need to harvest these resources which would be a win-win situation for all.
