A team of American geologists has recently discovered more
than $1 trillion in untapped mineral deposits in Afghanistan including iron, copper,
cobalt, gold and lithium. Some of these materials -lithium in particular, are
essential for the manufacturing of electronic products such as laptops and
mobile phones. The news of the vast mineral deposits in the south of the
country has created much excitement among politicians and was described by
president Karzai as a “massive opportunity”. Indeed, the sheer extent of the
mineral riches found in Afghanistan
means the country could become “one of the most important mining centers in the
world”, according to the New
York Times. The lucrative materials are bound to attract international
investment into the war-torn country and create employment for a native
population too often reliant on the cultivation of poppy seeds for a living.
One can easily picture the effects this could have on the future of the
country’s economic development and on the war. The mines would create jobs and
provide better prospects for 10 million unemployed Afghans, thereby decreasing
the Taliban’s recruitment pool- especially among the youth.
However, things could also go wrong if these resources are
not properly managed by the government. Rather than helping the country and
encouraging peace, the minerals could become a catalyst for violence and a
source of funding for the Taliban. Conflict-ridden countries with weak
governance and abundant natural resources are often a recipe for disaster. The
Democratic Republic of Congo (DRC) is a prime example of this. The government
has virtually no control over mineral resources in the east of the country,
which have been taken over by armed groups and members of the national army.
The latter are complicit in illegally taxing and systematically abusing miners
for their own financial benefits. Most of the minerals are smuggled into
neighboring Rwanda, Burundi and Uganda
before being sent to smelters in Asia and
ending up in our mobile phones or MP3 players. The returns made by violent
groups on the trade of these minerals are used to buy weapons and gain larger
control over the territory, at the expense of the local population. What will
stop the Taliban from doing exactly the same in Afghanistan?
To prevent this from happening, the US and Afghan
governments need to collaborate to strengthen internal governance and institutions-
the Ministry of Mines for instance- and ensure that adequate security
mechanisms are put in place around the mines and at the borders. Unfortunately,
this would require additional resources and manpower that the Afghan government
does not currently have; if the government can barely run proper elections, how
can it be expected to adequately manage trillions of dollars of mineral riches?
The Taliban will have taken control of most of the mines before the government
has had time to build the necessary infrastructure and instead of helping the
country, the minerals could become a further source of internal conflict.
China has
already set its eyes on Afghanistan’s
mines and it won’t be long before other investors want their piece of the pie.
In order to avoid being complicit in fueling the conflict and to ensure that
the mines are being used responsibly, future investors should carry out due
diligence before they buy minerals from Afghanistan. They should also
closely monitor the situation in the country and be transparent about their
operations to reassure stakeholders, including end-product users in the West. The
Organization for Economic Cooperation and Development is currently drafting due
diligence guidelines for the mining and minerals sector and has other useful
tools such as the Risk
Awareness Tool for Multinational Enterprises in Weak Governance Zones. This
tool, as well as the United Nations Global Compact’s Business
Guide to Conflict Impact Assessment and Risk Management, and the Extractives Industry Transparency Initiative,
provide good starting points for investors looking at high risk countries such
as Afghanistan.
But ultimately, it is up to the government to create a solid framework within
which companies can operate and people can work without fear of being abused or
exploited. Laws must be enforced against corruption, illegal taxation, forced
labor and other abuses; and for these laws to be enforced, public services and
governmental structures need to be strong. Sadly, this is not likely to happen any time soon in Afghanistan.
