Business & Economics,Features
Legal mining key to economic self-sufficiencyBy Masuda Sapi Jul 31, 2014 - 00:00
KABUL (Pajhwok): Afghanistan can become economically self-sufficient if its mineral riches are excavated in a professional and transparent way, some geologists and experts believe.
Afghanistan is bestowed with large-scale minerals such as iron, gold, oil, gas, copper, lithium and others.
Experts say proper excavation of mines could ensure the country’s economic development, but irregularities and corruption in the sector could have devastating consequences.
Dr. Najmuddin Tarin, the Academy of Sciences deputy director, said Afghanistan’s geo-political and socio-economic situation gave it importance in the region. “This importance is increased by precious natural resources existed in the country,” he added.
He said the geological structure of Afghanistan demonstrated it sat on huge natural assets.
“Afghanistan is situated on the Himalaya belt which has its own geographical specialties.”
Tarin said structure of Haji Gak mine that contained iron ore worth $2.8 to $3 billion was the best example of Himalayan belt.
He said Afghanistan has the largest copper reserves of the world in central Logar province.
In addition, the four sub-Himalayan belts in Nuristan, Hindu Kush mountain range, Badakhshan and Helmand provinces have other natural riches.
The sciences academy official deplored most mines in Afghanistan were unprofessionally and illegally excavated over the past three decades.
He accused neighbouring countries of encouraging unauthorised mining and smuggling of Afghanistan’s natural resources.
Tarin added precious stones and other riches of Afghanistan were openly sold in the Namak Mandi market area of Pakistan’s northwestern city of Peshawar.
According to Tarin, Pakistan earns $700 to $800 million annually through smuggled natural riches from Afghanistan.
He said the only solution to these problems was providing security for natural riches and implementation of laws, adding that the government should also ensure transparency in awarding contracts for the development of mines.
Effects of mines on economy
In the wake of dwindling international aid, the government should properly exploit mineral deposits in order to sustain economic growth.
Hasibullah Mowahid, lecturer at Kabul University and deputy head of Central Statistics Department, believes mines can leave huge positive social and economic effects on the lives of people through creating jobs.
In the current insecure environment, he added, extraction of minerals was not an easy task.
“In the long-run, investing in this sector could help Afghanistan become self-reliance,” Mowahid said.
A finance ministry official, speaking on condition of anonymity, said they had failed to achieve the target of 128 billion afghanis revenue set for 2014 from mines.
He linked the failure to illegal and unprofessional mining, no access to big international companies, security problems and failure to lure investments.
“If the country’s revenue resources are not strengthened and we failed to ensure transparent investment in the mining sector, we will be unable to achieve five billion afs in income from the riches over the next five years,” he believed.
According to Mowahid, the revenue from the mining sector in 2011 stood at $ 31 million, in 2012 at $25 million and in 2013 at $ 22.8 million.
He linked the gradual decrease in income to decreased production or excavation, falling global prices, closure of extracting companies in the wake of absence of security and labourers and illegal extraction of mines.
Describing illegal mining a big blow to the country’s economy, he said: “I will not agree with mineral extraction at this time because in the current situation we cannot assure transparency.”
If contracts were given to foreign firms, he said, under international norms and standards, 49 percent of revenue was given to the company and the remaining 51 percent went to the government.
Mowahid said absence of management in the mining sector has led to looting of natural resources.
He said African countries were rich because they possessed massive mineral resources, which were looted due to lack of management and needed measures.
Expressing concern over the future of mines in Afghanistan, he said: “If the government fails to properly manage natural resources, it will face the same fate like African countries.”
But Mowahid said Afghanistan could stand on its own feet if its mines were properly managed and explored. Afghanistan was on the path to economic development, but not on the level to produce its Gross Domestic Product GDP), he said.
“The country cannot be developed until the nation lacks standard and professional services, some foreign countries do not have natural resources but their economic situation is very well because they properly utilise human resources,” he said.
Mowahid added that mining in the current situation was not a good idea until the nation knew the importance of natural resources.
Ensuring security for mining process
Experts believe that the only factor behind illegal mining is the lack of security.
However, Ministry of Interior spokesman Sediq Seddiqi said Afghan National Police (ANP) have adopted tight security measures in areas where mines were illegally extracted.
As an example, he said illegal extraction of chromites was prevented in Kunar province after the police received a report in this regard.
“Police take serious measures for the protection of natural resources In line with directives from the Ministry of Mines,” he said.
Seddiqi rejected claims insecurity prevented mines from being explored in some areas, saying police were making efforts to ensure security for miners.
He further said special security guards had been deployed to protect mines projects across the country.
However, according to the Ministry of Mines and Petroleum, currently 1,400 mines are illegally dug in various parts of the country.