In this photograph taken on May 6, 2013, Afghan miners work at a factory near the village of Qara Zaghan in Baghlan province. Photo: AFP / Shah Marai

Afghanistan is a mountainous country. Although this land has had precious mines since ancient times, during most of the 20th century it did not progress in terms of exploration and exploitation of its mineral resources and it did not receive much attention from foreign countries. After the Soviet invasion of Afghanistan, more attention was paid to this, leading to the discovery and identification of resources such as copper and iron.

After the fall of the Taliban and the establishment of the Islamic Republic of Afghanistan, this issue received more attention from the government and foreign countries.

During the last two decades, we have witnessed the Afghan government’s efforts to identify natural resources in the country with the help of foreign governments and companies. Therefore, strategic, diverse and important reserves of copper, oil, gas, lithium, uranium, etc have been found and identified in different parts of Afghanistan. The total value of Afghanistan’s underground reserves appears to be a trillion dollars or more.

Information and statistics regarding Afghanistan’s natural resources are more general. But recognizing Afghanistan as a country with important, diverse and vast mineral reserves is important. These statistics should be considered in the analysis, policy-making and evaluation of organizations, non-governmental actors, and foreign powers. In the end, the existence of mineral resources could be both a threat to the country’s security and an opportunity for improved security and economic development in Afghanistan.

From a specific point of view, Afghanistan’s mineral reserves could be a source of hope for citizens for development and a formula for supplying financial resources. Currently Afghanistan faces such problems as a major proportion of its population in poverty, insecurity in many provinces, political and administrative corruption, low per capita income, dependence on foreign economic aid, and dozens of other economic challenges.

At the same time, ensuring security for Afghanistan’s mineral reserves could be a major support for the country’s economic, political and cultural growth and help eliminate backwardness. This requires security as a platform for development of the resource-extraction industry.

It should also be noted that if the government can find a precise formula for the exploitation of Afghanistan’s mineral resources, an important part of this will be ensuring that the financial needs of the security and military sectors are met. In addition, as the government’s economic capability increases thanks to the increase in the export revenues of the mining sector, its ability to tighten security in the provinces and prevent drug cultivation will also increase. 

This will have a positive long-term and mid-term effect on reducing the financial resources of insurgent groups from opium trading. In addition, by providing more security for the legal extraction of mineral resources, a large number of unemployed citizens and members of extremist groups will swarm to the mining sector and as a result, they will distance themselves from extremist groups such as Islamic State (ISIS).

Another cause of instability

Existence of mineral reserves in a country does not lead automatically to security and development. On the one hand, access to these reserves is a constant goal of extremist and terrorist groups. For the past two decades, the Taliban and other groups have sought to seize control of areas where there are underground reserves or to extort money from companies and individuals extracting them.

In fact, terrorist or anti-government groups that benefit from this sector are trying to block the government’s and investors’ access to mines in different regions. Continuation of this could lead to new instability in the country and further strengthen opposition groups and terrorist movements.

In addition, the illegal extraction and sale of precious stones and minerals in Afghanistan could, in the shadow of the government’s inability to contain it, be a factor in empowering armed groups in some areas. 

Also, the illegal profit of extraction and illegal sale of minerals by criminal organizations and armed opposition forces in some parts of the country is several times the government’s profit. As well, some of these resources are smuggled out of the country.

Unauthorized extraction by non-governmental actors not only harms the security-making process, but also strengthens such actors and terrorist and extremist groups. Apart from this, increasing foreign investment in underground reserves is a fundamental and obvious need. The exploitation of underground reserves requires sophisticated technology, so the government must provide the right conditions for foreign investment.

But the lack of security in many parts of the region has discouraged sponsorship by investment firms and other international players. If this continues, will open the door to extremist groups and non-governmental individuals to the exploitation of the country’s national resources, and will provide them with more financial resources and the possibility of greater insecurity.

Perspective

What is clear is that Afghanistan’s vast discovered mineral reserves could be seen as an opportunity to make the country more secure and help it achieve its political and economic goals, but also as a threat to its security and as an opportunity for the influence of other actors. It should also be noted that, in principle, any domestic and foreign investment in Afghanistan’s vast and diverse resources is tied to a variable called “security and stability.”

But the reality is that the government has failed to come up with a comprehensive approach to managing Afghanistan’s underground reserves, and in practice, contrary to the plans it has been made, profits from this sector have fallen far short.

Therefore, if the Afghan government fails to provide adequate security in the short and medium terms, it should not be expected that its economic programs for domestic and foreign mineral exploitation and investment will have a significant impact.

What is clear is that Afghanistan’s mineral sector has so far failed to provide an opportunity for improved security. But if peace talks are finally concluded and the Taliban shift their approach to providing security, this will provide an important opportunity to encourage foreign investment. Otherwise, the lack of security will continue to be the biggest challenge to exploiting Afghanistan’s natural resources.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

Farzad Ramezani Bonesh

Farzad Ramezani Bonesh is a researcher and analyst of international affairs. He graduated in political science from the University of Tehran. Farzad Ramezani Bonesh is a writer, senior researcher and analyst on regional issues, especially in the Persian Gulf ,MENA and South Asia. He has previously served as chief editor of research desk at several Iranian research centers. He has written hundreds of research articles, short analysis and journalism in Persian and English. He has had many interviews...