Afghan minister pins hopes on developing $3 trillion minerals industry

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.

“Any document you read on Afghanistan’s transition from aid dependancy to self-reliance, you will see that mining is the first sector to be utilised,” said Nargis Nehan, Afghanistan’s acting mines and petroleum minister. “There is hope, and there is potential.”

According to Nehan, 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.

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

The official believes that an awakening of Afghanistan’s 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 plenty, including copper, gold, lithium, talc, iron ore, and marble - are seen as being crucial to rebuilding a functioning economy in Afghanistan after four decades of war.

But in order to take advantage of its mineral industry, the minister said it was vital to restore investor confidence and modernise the way the government treated the country’s resources.

“It’s very important for us to make sure that we have a transparent, strong, and accountable legal framework in place for the sector,” Nehan said, adding: “We 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 these issues, Nehan said that she had led a ministry-wide crackdown on graft.

Whilst no ministry officials had been dismissed for allegations of corruption, she said, a number had been removed for “not performing their job.”

Nehan said that a review of the ministry conducted by the government anti-corruption office had revealed widespread “irresponsible” behaviour, which had “cost the ministry a lot.”

“All of them were [referred] to the attorney general and right now the investigation is going on.”

Many of these new anti-corruption principles have since been enshrined in to law.

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

Under the new law, 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, meanwhile, 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.

The businessman was also said to be keen to establish a security presence there, encouraging US President Donald Trump to privatise the US war in Afghanistan and use Prince’s security contractors instead of soldiers.

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 the Afghan people.

“He hasn’t officially talked to the government or the ministry.”

Nehan confirmed that he had met unofficially with politicians and members of the media in an effort to lobby.

“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,” she said.

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 and we will fully collaborate with [international firm], 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.”

“It’s a very sensitive area with lots of potential, but it has to be transparent,” she added. “Management of the process is very important.”

Aside from rampant corruption and the exploitation of resources, experts say the Taliban, and the country’s fragile security, pose yet another threat to the fledgling minerals industry.

According to campaign group Global Witness, the Taliban and other armed groups earn up to $20 million from the illegal mining and sale of the blue lapis lazuli stone.

A separate Global Witness report from May 2018 suggested that the Taliban made as much as $10 million annually from the sale of talc, commonly used to make baby powder.

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,” she said. “They are engaged, but not that engaged.”

The level of reported income that the Taliban were making from illegal mining operations was “really exaggerated.”

“Yes, they might be involved in marble and talc, but there are communities that are so engaged in mining that they would never allow the Taliban to just come and mine in their area.”

Nehan confirmed she was, however, willing to work with the Taliban in the event of a peace deal.