Thursday, September 13, 2012

Potential Mining Boom Splits Factions in Afghanistan

Mining projects have begun in some
 areas of Afghanistan with foreign help
KALU VALLEY (NYT)--Afghanistan's trillion dollar reservoir of natural resources in oil, gold, iron ore, copper, lithium and other minerals has increased corruption, and violence in Afghanistan. There is concern that the potential mineral wealth could fuel civil conflicts between ethnic groups. Mining projects are very beneficial for the citizens of Afghanistan. This summer an investment consortium arranged by JP Morgan Chase is mining for gold in Afghanistan, and a Chinese company is trying to develop a huge copper mine. Four copper and gold contracts are being tendered, and contracts for rare earth metals could be offered soon.  The World Bank estimates that mining and agriculture together could raise annual growth by 3 to 4 percentage points between now and 2025. Mining laws that are vital in attracting foreign investment are being delayed, which could potentially threaten several projects. Source: Potential for a Mining Boom Splits Factions in Afghanistan (Reliability: High)

Comment:  Among the Afghan public there is skepticism that Afghanistan's weak state and corrupt ministries can build a functioning mining economy that will benefit its citizens. The government has been accused of putting pressure on the Chinese oil company to make illegal payoffs. In Mes Aynak, nine villages were displaced for mining projects which has caused tensions among locals contending for compensation for their land.

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