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Takhar gold mine contract seen as illegal

Takhar gold mine contract seen as illegal

Aug 28, 2014 - 16:32

KABULinfo-icon (Pajhwok): The contract for the Nuraba and Semti gold mines has been awarded on the basis of favoritism and in a non-transparent manner. The contractor has failed to pay taxes and adopt measures for protecting the environmentinfo-icon, experts allege.

The gold mines are located in the Chahab district of northern Takhar province. The contracts were issued to the West Land General Trading Company (WLGTC) based on a 2008 mining draft law passed by the Council of Ministers. 

Shady contracts:

Javed Noorani, a mining expert, claimed the Nuraba and Semti mining contract inked between former minister WahidullahShahrani and WLGTC Chief Executive Abdul KabirBedil was largely based on their personal friendship.

He insisted the contract had no legal value because national interest had not been taken into consideration. Noorani warned the deal would lead to negative social and economic consequences.

A survey conducted back in 1970 during the Soviet era indicated different sites containing different amount of golds. As per the survey, there is a mine in Hesar, which has an estimated 437 kilograms of golds. Another mine site is situated in Nuraba having 210 kilograms of gold reserves. In Zanjir locality of Nuraba, the area has 155 kilograms of gold. Similarly, in Samti area has a total of 30 tonnes of mixed gold.

Noorani complained that experts were not taken into confidence on the contract.

The company had pledged to extract 1,700 kilograms of gold in one year, he said, asking how the firm had rushed to the estimate in the absence of a survey. Laws were in place but the contract trampled on them because of the Shahrani- Bedil friendship. The mining expert said that mining contractor should be from an experienced company with responsibility of taking care of environmental factors involved in the excavation process.

Noorani said multiple issues leading to confusion included the company’s claims of extracting 1,700 kilograms of gold in one year even before the mines were not surveyed. He accused Shahrani of protecting the company from paying government taxes.

In addition, the mining firm was assisted by a foreigner, David, who had close relations with Shahrani. Pajhwok Afghan News tried to contact the ex-minister to know his view but he flatly refused to speak on the issue.

Non-transparent bidding:

Ibrahim Jafari, a university lecturer and geologist, said: “Poor information about the background of this contract is a major problem because a mining contract is given as per law involving specific dates and numbers.”  The volume of its investment, social services and other necessary information should be mentioned in the contract, he reasoned.

He claimed contents of the documents had been changed. For example, the investment for exploration was put at 50 million afghanis first but the figure was later changed to 35 million afghanis when the contract was renewed. In addition, rules and regulations for mine exploration and environmental protection in the contract do not match. 

Eng. Ahmad Zia Azimi, representative of the WLGTC, said the old contract was amended because, after exploration, the firm found the exact amount of reserves was less than what the Ministry of Mines and Petroleum had claimed at the time of the bidding process.  

He added if the company was unable to abide by the agreed rules, the ministry should have cancelled the contract and there was no need for its renewal. There was no information on the exact amount of gold deposits in the old contract. The company, he said, was duty-bound to pay 99.99 percent tax to the government but that figure was brought down to 85 percent in the new deal. 

Legal anomalies:   

Under international principles, Jafari said, a mining contract should be in accordance with the law of the land. But both old and new contracts for the Nuraba gold mine have serious technical problems.

In developed countries, issues pertaining to the environment and social services dominate contracts, according to Jafari, who explained the government was bound to address such problems.

Hussain Rehani, a member of a social network monitoring natural resources, said revenue from mines and natural resources were national assets, not belonging to one individual or firm.

He believed transparency was very important in the bidding process, saying nonpayment of taxes was a grave injustice to the nation and wastage of national assets. The ministry should be held accountable if a contractor did not abide by terms and conditions. 

Gold processing: 

Dr. NajmuddinTareen, deputy chief of the Afghanistaninfo-icon Academy of Sciences, said the mining law was similar to laws of other countries. But it is not properly evaluated and implemented. 

Contracts for the cooper mine in Logar, iron mine in Bamyan, gas and petroleum in Amu River Basin in the north were awarded in line with the procedures followed in India, Africa and South America. 

“The contract for the Nuraba and Semti gold mine was awarded in 2008, but it is not implemented properly. It was amended in 2013 and it needed corrections,” he added. 

Tareen believed transferring gold abroad for processing meant a waste of national assets -- a job that should be done inside the country. Unfortunately, gold is taken out of the country for processing, he lamented.

“The government should get 100pc tax on the gold extracted from the mine. Unfortunately, the company has to pay 85pc of tax instead, which is against the national interests.”

Mohammad Tashi, director of Takhar mines and petroleum, defended the company’s position by saying that it had built a school close to the mine. The school included 24 classrooms and cost $400,000, he added.

Referring to locals’ reservation about the company’s services, Tashi said: “They have more demands and want the company to asphalt the entire district road.”

He maintained there was no threat to the environment and the firm was keeping its promise. “This company is equipped with good equipment. The only problem it faces is separating gold from other materials. It forces the company to carry out the process in Germany.”

Tashi added that 20 percent of pure gold must be paid by the company in taxes to the ministry. He denied reports that Westland Company had refused to pay taxes. “We haven’t seen any company or individual in Takhar refusing to pay taxes.”

Social services:

Pajhwok Afghan News could not contact the head of the Westland Company despite repeated attempts. Ahmad Zia Azimi, an official of the company, refused to comment, saying the firm was providing some social services.

Azimi added the social services included a deep drinking water well in Nuraba village, repairs of two local roads and some small-scale construction activities.

But locals expressed concern about the dilapidated condition of the district road. A Pajhwok correspondent in the area said residents were worried about the absence of any bridge in the area.

The contract binds the firm to invest $50,000 in provision of services for residents living around the mine. JavedNoorani, a mine expert, said the amount earmarked for development activities should have been spent at the beginning of extraction. Constructing only two kilometers of a road cannot be counted as social services.

On different wavelengths:

Mohammad Rafi Rafiq, a spokesman for the Ministry of Mines and Petroleum, told Pajhwok Afghan News most of the mines were being explored and the companies concerned were not responsible for provide services during the period.

The contractors are responsible for providing social services when they officially start extraction. But experts and people were unaware about the responsibilities of the companies, he pointed out.

Replying to a question, he said a new law had been approved but the president was yet to affix his signatures to it. Under the law, five percent of revenue from a mine should be spent on provision of social services by the contractor.


Contrast in statements

On one hand we read that the site "contained 361 to 450 kilograms of gold", but in another part of the news item we read that the company is going to extract 1700 KG per month. Meanwhile, Noorani said that the company is extracting 1,700 kilograms of gold in one year (as per claims of the company). Now we dont know about the volume of gold that the site contain and secondly how much gold would be extracted in one month by the company. 


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