Potential for a Mining Boom Splits Factions in Afghanistan – by Graham Bowley (New York Times – September 9, 2012)

http://www.nytimes.com/

KALU VALLEY, Afghanistan — If there is a road to a happy ending in Afghanistan, much of the path may run underground: in the trillion-dollar reservoir of natural resources — oil, gold, iron ore, copper, lithium and other minerals — that has brought hopes of a more self-sufficient country, if only the wealth can be wrested from blood-soaked soil.

But the wealth has inspired darker dreams as well. Officials and industry experts say the potential resource boom seems increasingly imperiled by corruption, violence and intrigue, and has put the Afghan government’s vulnerabilities on display.

It all comes at what is already a critically uncertain time here, with the impending departure of NATO troops in 2014 and old regional and ethnic rivalries resurfacing, raising concerns that the mineral wealth could become the fuel for civil conflict.

Powerful regional warlords and militant leaders are jockeying to widen their turf to include areas with mineral wealth, and the Taliban have begun to make murderous incursions into territory where development is planned. In the capital, Kabul, factional maneuvering is in full swing, including disputes over lucrative side contracts awarded to relatives of President Hamid Karzai.

Further, a proposed mining law vital to attracting foreign investment is up in the air, with the delay threatening several projects. The cabinet rejected it this summer, saying it was too generous to Western commercial interests. But some Western officials fear other motives are at work, too, including an internal fight for spoils, and perhaps an effort by some neighboring countries to sway sympathetic officials to keep Indian and Chinese state mining companies out.

“If you were to pick a country that involves high risk in developing a new mining sector, Afghanistan is it,” said Eleanor Nichol, campaign leader at Global Witness, a group that tries to break the link between natural resources, corruption and conflict. “But the genie is out of the bottle.”

Already this summer, the China National Petroleum Corporation, in partnership with a company controlled by relatives of President Karzai, began pumping oil from the Amu Darya field in the north. An investment consortium arranged by JPMorgan Chase is mining gold. Another 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 Ministry of Mines has also requested bids for a richer oil concession in the Afghan-Tajik basin, and American officials are optimistic it could come online soon.

And in the shadow of the Black Mountain, here in the Kalu Valley in remote Bamian Province, villagers hope that Indian and Canadian mining operations can turn buried iron ore into new lives for struggling families, breaking a cycle of poverty in this high place cut off by snow for six months of the year.

When the digging begins, Abbas Ali, a 30-year-old farmer here, will have to give up the four-acre potato field his family has worked for generations. He is more than ready.

“Our life will change 180 degrees,” Mr. Ali said this summer, staring up with fervent brown eyes at the bowed wooden roof beams in the white-walled madrasa where he teaches for extra income. “We support any effort to make it happen quickly.”

That hope, and the prospect of more self-sufficiency as international aid ebbs, is driving Afghan officials like the minister of mines, Wahidullah Shahrani, as he tries to get more projects going. The World Bank estimates that if things go very well, mining and agriculture together could raise annual growth rates by 3 to 4 percentage points between now and 2025.

For the rest of this article, please go to the New York Times website: http://www.nytimes.com/2012/09/09/world/asia/afghans-wary-as-efforts-pick-up-to-tap-mineral-riches.html?pagewanted=all

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