$1 Trillion In Minerals Found In Afghanistan

clustro writes "American geologists working with the Pentagon have discovered deposits of iron, copper, cobalt, gold, and lithium of incredible bounty, amounting to nearly $1 trillion. In fact, the lithium deposits are so vast, an internal Pentagon memo has stated that Afghanistan could become the 'Saudi Arabia of lithium.' The wealth of the deposits completely flattens the current GDP of Afghanistan, estimated at about $12 billion. Mining would completely transform the economy of Afghanistan, which presently is propped up by the opium trade and foreign aid. However, it could take decades for extraction to reach its full potential due to the war, the lack of heavy industry in the country, and a corrupt national government."

Comments

Beter later than never.

[ThePangolino]

China was on it since 2008. At least. http://www.timesonline.co.uk/tol/news/world/asia/article3941656.ece
The Economist had an interesting story about it something like one year ago. I couldn't find it unfortunately.

The poor will see nothing.

[gd2shoe]

Sadly, no. You must start with a healthy government before mineral riches become a boon to the average citizen, let alone the poor.

http://www.hulu.com/watch/91538/vanguard-rebels-in-the-pipeline

Re:CNN said this could make it the saudi arabia

[WalksOnDirt]

Saudi Arabia is not poor, and by that I mean the people are not poor. The government spreads the oil money around a fair bit. They import people to be poor, er, I mean to do the work the Saudis don't want to.

Mineral deposits almost never reduce poverty.

[adam]

If you think mineral deposits "wipe out poverty" you ought to travel to west Africa.

The vast majority (99%+) of Sierra Loeneans who spend their lives in poverty, toiling to find diamonds, have never seen a finished and cut diamond. Many never even find a single diamond. Sierra Leone ranks amongst the five least developed countries.

A single gold mine in Mali will produce $1.5BN (USD) and has made a 0.07% reinvestment ($100k) in schools from its World Bank loan. The words of one worker, “[w]e read on the Internet that AngloGold has pronounced that Morila is the most profitable gold mine in the world, and yet most workers here get no lodging or training, or even health care. In South Africa, AngloGold is paying for the anti-retrovirals for its staff that are HIV-positive, and here they take all our medical costs out of our salaries.” Mine companies often pay only hundreds of thousands of dollars per year in lease fees.

Rutile is 95% titanium dioxide and Sierra Leone’s deposits of rutile may account for as much as 30% of the world’s supply, and the U.S. government lists it as a “strategic metal” to be stockpiled by the U.S. defense department. Sierra Leone is pock-marked by destroyed farmland and displaced communities, all in the name of rutile and diamond minining.

Another poster made an allusion to the mid-east, but Africa I think is a much better example as oil actually has been good for the average person in some mid-east countries, but these are fairly stable and developed countries. To look at natural resource reserves in unstable and undeveloped countries, versus stable, one only has to look at Oman and Yemen (both oil-rich and neighbors, one has GDP per capita 10x of the other). West Africa is a much better comparison to Afghanistan than Kuwait or the UAE (so if you want to make the mid-east comparison, skip Dubai and look at Yemen).

For a good read (and my source for much of the info above) I would recommend Joan Baxter's Dust from our Eyes.

Re:Mineral deposits almost never reduce poverty.

[Anonymous Coward]

A few points

• You ignore any tax, royalty or dividens the local governments get
• By your figures, you seem to imply the Morila mine got a $150m loan from the World Bank.
  • Mining companies usually finance their own exploration & development
  • The loan, if given, should be paid back to the World Bank, not reinvested in the community
  • This seems to imply the Morila mine received no loan, while a related project got a $25m loan back in 1996. As an aside, the same article also metions that the Government of Mali got $156m in taxes, royalties and dividends from the property that did get the loan
• Community investment is now standard practice by all respectable mining companies operating in the third world
  • The investment from the mine you mentioned is more that $100k; apparently, $160k was invested in a single year:

    "Randgold Resources is also committed to the integration of environmental and social impact management into its business activities, and operates to international standards in this regard. On the social responsibility front, Morila last year spent more than US$160 000 on direct community development while Loulo spent more than US$240 000 on projects ranging from building and equipping schools to malaria control programmes," he said.

  • The same press release gives a current figure for the taxes, royalties and dividends:

    Bristow said Mali presented an outstanding example of what this approach could achieve. He noted that over the past 10 years, Randgold Resources alone had invested and reinvested more than US$1 billion there. During that time, the mines it developed at Morila and Loulo - in areas where there had been little economic activity other than subsistence farming - had paid US$500 million directly to the government in taxes, royalties and dividends. It was the largest single taxpayer in the country as well as its largest private-sector employer...

• Finally, if you want to look at West Africa, why not look at Ghana - the first West African country to gain independence, a country with political and social stability, and a country with a long history of mining (it used to be known as the Gold Coast). Mining there is a huge contributor to the national economy, and has been for years.

Mining can be damaging to the environment and to communities, and it is important that a close eye be kept on the industry, especially when it operates in countries with weak governments. But, the assumption that mines are inherently destructive, and that mining companies are inherently evil, is wrong.

Re:That's Great But...

[psnyder]

My understanding is that US citizens must pay taxes in the USA even if they work abroad

As a US citizen that works abroad, I have to FILE taxes, but pay nothing. I basically declare that I made a certain amount working abroad and was taxed in that country. I declare I made 0 in the US, and I owe 0 US taxes. Apparently making rather large sums of money overseas is different, according to the H&R Block person who helps me file.

Also, bringing over 10K back into the US is taxed.

Note: I live in a 1st world country that the US is quite friendly with. It may be different in Afghanistan.

This is great news because this could help wipe out Afghanistan's poverty, the actual biggest obstacle to a functioning government.

That's exactly what happened everywhere oil or minerals have been discovered around the world. Middle East currently enjoys highest standard of living than the rest of the world thanks to half a century of massive oil extraction. Oh wait...

The United Arab Emirates has a fairly high standard of living because of the discovery of oil there. Before discovering it, they were scraping by on fishing.

However, it's not a 1 step process. The 2nd step has a lot to do with it: "The late Sheikh Zayed, ... president of the UAE at its inception, ... directed oil revenues into healthcare, education and the national infrastructure."

Re:That's Great But...

[arobatino]

This is great news because this could help wipe out Afghanistan's poverty, the actual biggest obstacle to a functioning government.

http://en.wikipedia.org/wiki/Resource_curse

To address your points.

[adam]

[1] I don't ignore tax/royalty/dividends that may go to the local government in my original post. I partially address this (mine leases in Mali that are in the hundreds-of-thousands-of-dollars per year), but even if the mines are paying "fair" taxes (etc) to the governments, that implies very little about eradicating poverty in a country that is unstable undeveloped. See: Yemen vs Oman. When something like 90% of US foreign aid comes directly back to the United States (source: Baxter's book, which is full of cites, apologies I don't have it available), I am dubious that the taxes paid by natural resource extraction firms will be any more beneficial to the impoverished people of a region.

[2] Morila did get a $150M loan, yes (source: Joan Baxter). These types of loans usually call for community investment, that is the point of the World Bank (ostensibly anyway), to develop countries, not to make mine owners richer (although you can make a good argument for the inverse! See documentary: Life and Debt). As to whether they got this loan, I tend to trust Joan Baxter on this matter (she's a BBC correspondent, etc), although I don't have her book handy (I loaned it to a colleague).

[3] Claims of community reinvestment are now standard practice, sure. Note: you are citing mining companies press released. According to BP's web site they are "unaware of any reason" that would have caused their "share price movement." This just happens to be a timely example, but I think it's a good one, in that it's pretty obvious what caused their share price movement (I assume their argument would be that they are still quite profitable despite their current environmental catastrophe — while that may be true, this argument is spin, at best). I am extremely dubious of any claims made by mining interests as to what they are investing in communities. I'd rather believe neutral sources (like BBC reporters) who actually VISIT these areas and report on what they've seen. "Investing" $240,000 might mean they have a $200,000/yr consultant on payroll and he had $40,000 in expenses while "researching" how to help the community.

Quoting your press released, "in areas where there had been little economic activity other than subsistence farming..." Maybe those farmers were happy. Now there is "economic activity" there, but are the farmers more or less impoverished? I'll bet more. We are debating whether minerals in undeveloped countries bring people out of poverty, mind you, not whether mining companies pay taxes.

[4] Ghana is the most stable of western African countries, and thus the least applicable to Afghanistan. Nevertheless, I'm happy to talk about it. I'll be spending three months in Ghana this year doing infectious disease work, so I'm reasonably versed on its issues. As you stated, Ghana might be the best case example. Even so, a third of the country lives on less than a dollar a day, and although that percentage has come down a lot, and they may well meet their MDG for poverty by 2015, it's still not great. More than half the country lives on less than $2/day. 40 years ago South Korea and Ghana had the same per capita income (source: council on foreign relations). Still think mining has brought Ghanaians out of poverty? PPP GDP nowadays for Korea = $27000, Ghana = $1400. No contest as to who is still mired in poverty. I'll admit that I have a biased perspective, when I see children dying because their parents couldn't afford the twenty-six cent cost of a measles inoculation, three dollars for malaria treatment, or ten dollars for a bed net. And I have yet to witness mining or oil extraction doing much to help fix this. Sierra Leone, Nigeria, etc, the story is always the same ... as the "subsistence" farmers if their lives are better after the "economic activity" came to their region, and the answer is invariably: NO.

[5] To address the last sentence of your post, "But, the assumption that mines are inherently destructive, and that mining co