Security, geography hinder mining investment in Afghanistan

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On June 16, 2010

Afghanistan’s political instability, geography and poor infrastructure will likely impede the nation’s development into one of the world’s leading mining centers, say two mining engineering experts from Missouri University of Science and Technology.

“The only way Afghanistan’s mineral wealth can benefit the country is if it attains political peace and security,” says Dr. Samuel Frimpong, the Robert H. Quenon Chair of Mining Engineering at Missouri S&T. “No company would want to invest in a country where tribal warfare or any kind of political instability exists.”

“There are a lot of obstacles” facing Afghanistan’s development as a mining powerhouse, says Dr. David A. Summers, Curators’ Professor Emeritus of mining engineering at Missouri S&T. “There is a lack of water and major resources” needed to create a mining operation. “We’ve dealt with all of these before, but not generally in the face of an insurgency.”

Earlier this week, the U.S. military announced the discovery of nearly $1 trillion in untapped mineral deposits in Afghanistan. The deposits include huge veins of iron, copper, cobalt, gold and critical rare-earth metals like lithium, a critical ingredient in batteries for electric vehicles and laptops. According to an internal Pentagon memo, the find could turn Afghanistan into the “Saudi Arabia of lithium.”

While it could take years to develop a mining industry in Afghanistan, Frimpong and Summers both cite similar obstacles, chief among them being political instability. But a poorly developed infrastructure, the mountainous terrain and the lack of a trained work force could further hinder the development of a mining industry in that nation.

“The mining industry is almost nonexistent” in Afghanistan, says Frimpong. “This means that investors will have to transport equipment and materials into the country, and transportation will be a big issue due to the mountainous regions.”

According to Summers, it would probably take seven years and at least $500 million to establish a mining operation in Afghanistan.

Transporting equipment through politically unstable portions of the country is risky, says Summers. So is attempting to transport the minerals out of the country. Moving minerals out of Afghanistan would require secure transport, he says. “You become very vulnerable to terrorists.”

Moreover, Frimpong says, “There is a lack of human capital. They have not had a stable environment to train a work force, so the mining industry would have to rely on a foreign work force.”

Ideally, the recent discovery of mineral wealth “could be a catalyst to drive the country toward peace and stability,” Frimpong says. “But if you look at the history of many nations in similar situations, the discovery of mineral wealth has often led to greater problems.” He and Summers point to the examples of Sierra Leone and Angola, where trade in “blood diamonds” has funded rebel groups, and in the Sudan, where in 2002 Canadian oil company Talisman withdrew operations over concerns that the Sudanese government may have used revenue from that project to fund civil war efforts.

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On June 16, 2010. Posted in Mining Engineering, News, Top Headlines