Thursday, October 4, 2012

Doubt Cast on Afghan MIning

WASHINGTON (WSJ) -- Afghanistan hopes to transform its $1 trillion in mineral deposits into a reliable economic base. However, researchers working for the U.S. military concluded that the cost to build and run a rail network across Afghanistan could cost greater than $54 billion.

A spokesman for Afghanistan's Foreign Ministry questioned the cost estimate and predicted that in the end the benefits of a nationwide rail system would outweigh the costs.  Officials in Afghanistan hope to generate $300 million from mining projects by 2016.  Within 12 years, Afghans hope mining revenues will contribute to half of the country's GDP, yet no large-scale  mining projects are in operation.

U.S. Department of Defense strategists backed the Afghanistan government in selling its biggest mineral interests to Chinese, Indian, Canadian and U.S. companies, from whom it hopes to receive licensing fees and royalties. The U.S. first began to consider minerals as a possible economic boost for Afghanistan in 2010. But U.S researchers outlined hurdles that would be difficult to overcome. It would require up to 3,000 miles of track through 16,000-foot mountain ranges.

Western officials however said Afghanistan would be able to pursue other major projects that use trucks rather than rail.  Source: Doubt Cast on Afghan Mining (Reliability: High)

Comment: According to the USGS, in addition to billions of dollars worth of iron and copper, there is an estimated $25 billion of gold, $81 billion of niobium, and sizable quantities of cobalt, molybdenum, asbestos, silver and other industrial minerals in Afghanistan mines.  U.S business interested in Afghanistan mines would benefit from pursuing the feasibility of strategic mineral mining to lessen our dependency on China. 

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