U.S. Identifies Vast Riches of Minerals in Afghanistan

[Exonerate]

U.S. Identifies Vast Riches of Minerals in Afghanistan
By JAMES RISEN

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists. The Afghan government and President Hamid Karzai were recently briefed, American officials said.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

“There is stunning potential here,” Gen. David H. Petraeus, commander of the United States Central Command, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion.

“This will become the backbone of the Afghan economy,” said Jalil Jumriany, an adviser to the Afghan minister of mines.

American and Afghan officials agreed to discuss the mineral discoveries at a difficult moment in the war in Afghanistan. The American-led offensive in Marja in southern Afghanistan has achieved only limited gains. Meanwhile, charges of corruption and favoritism continue to plague the Karzai government, and Mr. Karzai seems increasingly embittered toward the White House.

So the Obama administration is hungry for some positive news to come out of Afghanistan. Yet the American officials also recognize that the mineral discoveries will almost certainly have a double-edged impact.

Instead of bringing peace, the newfound mineral wealth could lead the Taliban to battle even more fiercely to regain control of the country.

The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced.

Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral-rich districts. Afghanistan has a national mining law, written with the help of advisers from the World Bank, but it has never faced a serious challenge.

“No one has tested that law; no one knows how it will stand up in a fight between the central government and the provinces,” observed Paul A. Brinkley, deputy undersecretary of defense for business and leader of the Pentagon team that discovered the deposits.

At the same time, American officials fear resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth, which could upset the United States, given its heavy investment in the region. After winning the bid for its Aynak copper mine in Logar Province, China clearly wants more, American officials said.

Another complication is that because Afghanistan has never had much heavy industry before, it has little or no history of environmental protection either. “The big question is, can this be developed in a responsible way, in a way that is environmentally and socially responsible?” Mr. Brinkley said. “No one knows how this will work.”

With virtually no mining industry or infrastructure in place today, it will take decades for Afghanistan to exploit its mineral wealth fully. “This is a country that has no mining culture,” said Jack Medlin, a geologist in the United States Geological Survey’s international affairs program. “They’ve had some small artisanal mines, but now there could be some very, very large mines that will require more than just a gold pan.”

The mineral deposits are scattered throughout the country, including in the southern and eastern regions along the border with Pakistan that have had some of the most intense combat in the American-led war against the Taliban insurgency.

The Pentagon task force has already started trying to help the Afghans set up a system to deal with mineral development. International accounting firms that have expertise in mining contracts have been hired to consult with the Afghan Ministry of Mines, and technical data is being prepared to turn over to multinational mining companies and other potential foreign investors. The Pentagon is helping Afghan officials arrange to start seeking bids on mineral rights by next fall, officials said.

“The Ministry of Mines is not ready to handle this,” Mr. Brinkley said. “We are trying to help them get ready.”

Like much of the recent history of the country, the story of the discovery of Afghanistan’s mineral wealth is one of missed opportunities and the distractions of war.

In 2004, American geologists, sent to Afghanistan as part of a broader reconstruction effort, stumbled across an intriguing series of old charts and data at the library of the Afghan Geological Survey in Kabul that hinted at major mineral deposits in the country. They soon learned that the data had been collected by Soviet mining experts during the Soviet occupation of Afghanistan in the 1980s, but cast aside when the Soviets withdrew in 1989.

During the chaos of the 1990s, when Afghanistan was mired in civil war and later ruled by the Taliban, a small group of Afghan geologists protected the charts by taking them home, and returned them to the Geological Survey’s library only after the American invasion and the ouster of the Taliban in 2001.

“There were maps, but the development did not take place, because you had 30 to 35 years of war,” said Ahmad Hujabre, an Afghan engineer who worked for the Ministry of Mines in the 1970s.

Armed with the old Russian charts, the United States Geological Survey began a series of aerial surveys of Afghanistan’s mineral resources in 2006, using advanced gravity and magnetic measuring equipment attached to an old Navy Orion P-3 aircraft that flew over about 70 percent of the country.

The data from those flights was so promising that in 2007, the geologists returned for an even more sophisticated study, using an old British bomber equipped with instruments that offered a three-dimensional profile of mineral deposits below the earth’s surface. It was the most comprehensive geologic survey of Afghanistan ever conducted.

The handful of American geologists who pored over the new data said the results were astonishing.

But the results gathered dust for two more years, ignored by officials in both the American and Afghan governments. In 2009, a Pentagon task force that had created business development programs in Iraq was transferred to Afghanistan, and came upon the geological data. Until then, no one besides the geologists had bothered to look at the information — and no one had sought to translate the technical data to measure the potential economic value of the mineral deposits.

Soon, the Pentagon business development task force brought in teams of American mining experts to validate the survey’s findings, and then briefed Defense Secretary Robert M. Gates and Mr. Karzai.

So far, the biggest mineral deposits discovered are of iron and copper, and the quantities are large enough to make Afghanistan a major world producer of both, United States officials said. Other finds include large deposits of niobium, a soft metal used in producing superconducting steel, rare earth elements and large gold deposits in Pashtun areas of southern Afghanistan.

Just this month, American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.

For the geologists who are now scouring some of the most remote stretches of Afghanistan to complete the technical studies necessary before the international bidding process is begun, there is a growing sense that they are in the midst of one of the great discoveries of their careers.

“On the ground, it’s very, very, promising,” Mr. Medlin said. “Actually, it’s pretty amazing.”

A friend of mine pointed me towards this and he viewed it as a boon for the Afghan economy that would allow a transition from a drug-based economy to a mining economy. No doubt if these deposits are recoverable and economical they would have a drastic impact on the country, although I'm somewhat skeptical on whether the average citizen is going to get their fair share of this bounty. In any case, it seems like the struggle for influence in Afghanistan is going to intensify.

[Eframepilot]

A reason to never leave! Hurrah!

[Temujin]

I remember hearing some preliminary speculation about this a few years back. Haven't heard anything until now.

While I doubt Afghanistan will be able to get their shit together to truly take advantage of this, if they do they'll become another Saudi Arabia alright; a super rich royalty and religious caste with large numbers of poor indigenous and immigrant workers.

As for China, I look at it this way; if they want the resources so bad let them get bogged down trying to manage a never ending tribal conflict.

[The Grim Squeaker]

A reason to never leave! Hurrah!

More like something to supply the basis for a proper economy there!

They lack an educational infrastructure or even cultural imports, but even the weakest 3d world countries can make a mint out of natural resources (even if mining isn't quite as easy to exploit as oil).

It's more money than the poppies, and a source for government income that will need tons of relatively unskilled workers (these aren't tapped out mines requiring state of the art mining equipment presumably).
No arguments on it being a massive source for corruption and that most of the money will get siphoned down the pockets of corrupt officials, but well, it's hard to see how things could get any worse.

[Thanas]

Unless the political climate is at least semi-stable, nobody will care about those riches.

[Teleros]

No arguments on it being a massive source for corruption and that most of the money will get siphoned down the pockets of corrupt officials, but well, it's hard to see how things could get any worse.

Pretty much what I thought.

Unless the political climate is at least semi-stable, nobody will care about those riches.

I wouldn't be too sure about that. Plenty of mining companies operate in dodgy areas already, Afghanistan will just be more expensive than most due to the security needed.

[Thanas]

Unless the political climate is at least semi-stable, nobody will care about those riches.

I wouldn't be too sure about that. Plenty of mining companies operate in dodgy areas already, Afghanistan will just be more expensive than most due to the security needed.

No, Afghanistan will be more of a nightmare. Why? Because it is hard to get stuff out of there, most other firms at least have some sort of infrastructure that helps getting the stuff out etc.

[Starglider]

I wouldn't be too sure about that. Plenty of mining companies operate in dodgy areas already

Such operations are a lot more practical for diamonds and precious metals than for bulk minerals or even rare earths. Certainly with current gold prices, I'd imagine opening gold mines would be at the top of the list.

[eion]

Lithium has got to be their No 2 priority, if not the first.

One estimate places the amount of lithium and other rare earth elements at around 77,497 metric tons ($7.4 billion estimated value), or about half as much gold as has EVER been mined in the history of the world.

That could drop the price of lithium-ion batteries (think affordable electric cars) by quite a bit assuming it can be extracted economically, which is far from a safe assumption.

The Congo, Saudi Arabia, or Colonial America, just a few models of what happens with an abundance of natural resources.

[Phantasee]

For a sense of scale, how much lithium does it take to make a cellphone battery, or how much lithium is required to make the Chevy Volt?

[Illuminatus Primus]

Wonder who would own the mines.

[[R_H]]

Wonder who would own the mines.

No-one? Afghanistan isn't all that stable at present, which I'm sure you've noticed.

[eion]

For a sense of scale, how much lithium does it take to make a cellphone battery, or how much lithium is required to make the Chevy Volt?

The volt question is easier to answer I think.

According to this, it costs GM about $ 8,000 to produce their 16kWh battery pack (or $500 per kWh). The battery is overbuilt to allow more discharge cycles, apparently, which probably means that cellphone batteries are cheaper to produce than car batteries.

And according to this, you need about 2 - 3 kg of technical grade Lithium Carbonate per nominal kWh, so the Chevy volt needs about 32 to 48 kg per battery pack of Lithium Carbonate. Someone with more chemistry skill than me can probably do some quick back-of-the-envelope calculations, if we knew what concentration the lithium ore might be, and figure out what these reserves might yield once refined and processed.

Updated info from NYT shows that the lithium reserves could equal those of Bolivia in size (about 5.4 million tons), and since Bolivia has the world's largest lithium reserves fully utilizing the reserves in Afghanistan could greatly increase the world's lithium supply, and assuming mining costs remain the same (BIG assumption for Afghanistan), you could thus greatly reduce the cost of lithium, which will reduce the cost of producing batteries. Of course, since a private company would probably get the mineral rights, they're not going to want to reduce the cost of lithium that much unless they are fully vertically integrated, and even then probably not.

Of course, we've know this stuff was there since the 70s. There's also significant quantities (about 230 billion tons, at a concentration of 0.1 to 0.2 ppm) of lithium in seawater, the trick, as in Afghanistan, is getting it out.

[Illuminatus Primus]

Wonder who would own the mines.

No-one? Afghanistan isn't all that stable at present, which I'm sure you've noticed.

You don't think this wouldn't provide significant incentives to improve the stability more quickly and completely? And in any case, you're being obtuse. You know exactly who would own them, and who would be shit on for them.

[Guardsman Bass]

I'm suspicious of the timing. The reports on this by the US Geological Survey have been available since 2007, yet suddenly this gets a push when US efforts to stabilize Afghanistan are falling to pieces and they need additional political support at home for their efforts?

In any case, all those resources are useless if they don't have a secure way of getting them out of the country in terms of infrastructure. Does anyone see Afghanistan becoming stable enough for that anytime soon? Bolivia is far more attractive by comparison.

You don't think this wouldn't provide significant incentives to improve the stability more quickly and completely?

What, has the US somehow discovered some secret way to rapidly improve security in Afghanistan in spite of years of efforts to do so that have failed? "Incentives" are nice, but they mean about jack shit in this situation (particularly since they've known about this for years already - some incentive that. It reeks more of desperation).

[The Spartan]

Funny you should ask that Guardsman, 'cause other people are asking the same thing.

Yahoo News

Afghan mineral wealth raises host of questions
Mon Jun 14, 2:23 pm ET

The U.S. military has discovered "nearly $1 trillion in untapped mineral deposits" in Afghanistan, the New York Times' James Risen reports in a Monday front-page story — a development that could "alter the Afghan economy and perhaps the Afghan war itself." General David Petreaus said the realization offered "stunning potential" to change the dynamic in that country.

The story has an Indiana Jones aspect: Afghan geologists protected decades-old Soviet geological surveys showing the routes to billions of dollars worth of copper, lithium, iron and gold reserves — surveys that the U.S. military recently revived in a find that could upend the war's current dynamic.

But, as Talking Points Memo's Josh Marshall, Foreign Policy's Blake Hounshell and others have pointed out, the story raises as many questions as it answers. Afghanistan has long been known as mineral-rich country. More than a year ago, McClatchy Newspapers reported that Afghanistan's Aynak copper mine, which is currently being developed by China, is the planet's second-largest copper deposit. The McClatchy piece also noted that "the region is thought to hold some of the world's last major untapped deposits of iron, copper, gold, uranium, precious gems and other raw materials."

The Times' Risen notes that the data on which the new trillion-dollar assessment is based were collected during a 2007 survey. Last year the Pentagon conducted a study to "translate the technical data to measure the potential economic value of the mineral deposits," he reports, and came up with $1 trillion. And the Associated Press notes that just last month at a U.S. Institute of Peace event, Afghan President Hamid Karzai estimated his country's mineral wealth could total as much as $3 trillion.

So why is this information coming out now?

The war in Afghanistan is not going well. Just Friday, the Times' Dexter Filkins reported that Karzai himself is said to doubt that the Americans can succeed and is reportedly working on brokering his own deal with the Taliban outside the auspices of NATO. From the Pentagon's perspective, recasting old information about the country's hard-to-access mineral reserves as a potentially game-changing bounty — and then handing it to the Times — could ward off slacking resolve in the American public and create a new argument for sticking with the war. It's certainly easier to imagine a stable, democratic endgame for Afghanistan if you've got a trillion dollars in mineral wealth to play with.

Of course, it would be easy for insurgents to disrupt the extraction of those minerals, and Afghanistan's Mines Ministry has a reputation as the most corrupt backwater of an extremely corrupt national bureaucracy. In January, the country suspended the granting of new mining concessions in a bid to stamp out corruption. So it's very much an open question how that mineral wealth would eventually get translated into actual revenue and jobs.

The story also raises the question of why the U.S. Geological Survey and the Pentagon are spending resources to map Afghanistan's mineral wealth. The benefits are obvious, but why weren't private developers, who traditionally don't let wars and political instability get in the way of mining operations, already onto this trillion-dollar windfall?

Finally, the potential $1 trillion question in all this is: Who will get the rights to these minerals? China is already operating the largest mine in Afghanistan — and has yet to produce any copper. George W. Bush's administration famously argued that oil exploitation would offset the costs of the invasion and occupation of Iraq, but American companies were largely shut out of oil concessions there. In the case of Afghanistan, the USGS has apparently invested significant resources into mapping the mineral wealth, but it's unclear whether private mining companies were involved as well — leaving open the question of whether the U.S. will get a cut of any development.

— John Cook is a senior national reporter/blogger for Yahoo! News.

[Aaron]

You don't think this wouldn't provide significant incentives to improve the stability more quickly and completely? And in any case, you're being obtuse. You know exactly who would own them, and who would be shit on for them.

It's pretty fucking obvious; whatever warlord controls the territory, and then whatever warlord takes it from him. That and the inevitable fortune in bribes to said warlord, his cronies and whoever happens to hold up the convoys will prevent this from ever being extracted.

[MKSheppard]

No actually, the chinese will buy the mineral rights from the Afghan government, then import everyone from China to run the mine, and then deploy a PAP detachment. If things go fine the first few years, then the Chinese will increase the amount of Afghan employment at the new mine.

[Aaron]

No actually, the chinese will buy the mineral rights from the Afghan government, then import everyone from China to run the mine, and then deploy a PAP detachment. If things go fine the first few years, then the Chinese will increase the amount of Afghan employment at the new mine.

I'm going to laugh my ass off if the Chinese wind up stabilizing Afghanistan and bring them into the 21st century with this. Right after I go spit on Jean Jean Chrétien for wasting my buddies lives.

[Ryan Thunder]

Why the hell would they be able to do it when we couldn't?

[Aaron]

Why the hell would they be able to do it when we couldn't?

Apparently they do a fair bit of mining and such in other shitholes. You'd have to ask Shep for more details, cause thats all I know. Frankly the Chinese are welcome to the place, as far as I'm concerned. Let them deal with it.

[Phantasee]

Not being white/Western would probably help. I hear they have a great track record of "aid" in Africa as well. Plus the whole "enemy of my enemy is my friend" sentiment. China isn't the US's butt boy, and they generally let local governments, whoever they may be, do as they please, as long as china gets the resources they've been looking for.

[Fingolfin_Noldor]

Why the hell would they be able to do it when we couldn't?

Because China has plenty of manpower to waste and has no qualms about playing the absolute most dirty.

[mr friendly guy]

Why the hell would they be able to do it when we couldn't?

They have had some successes in PNG where we (Australia) failed due to civil war. Usually it involves bringing workers from China who get paid slightly better than if they did a similar job in China. Also note how they do deals with regimes in Africa. They aren't interested in regime change or spreading democracy. They let the government do what they want as long as China gets what it wants out of the deal. The downside is of course corrupt governments don't have much incentive to improve, the upside being that despite this, the economic benefits do apparently get filtered down to the guy on the street.

That being said, Afghanistan the conqueror's graveyard is a whole new proposition with their multi tribes and rivalries between them. I would imagine this would be difficult for even China to attempt.