Afghanistan signs major mining deals in development push

AFGHAN officials have signed contracts for two major mining projects in northern Afghanistan, pushing ahead with plans to develop the country’s mineral reserves, but drawing criticism over the involvement of a former minister in the project.

The deals were signed in Washington on Friday with mining and investment group Centar and its operating company Afghan Gold and Minerals to develop two sites in Badakhshan and Sar-e Pul provinces with potentially major gold and copper deposits.

The deals, reviving projects that have been stalled for years, follow a push by US and Afghan authorities to develop mineral resources estimated to be worth some $1 trillion (R14.75trln) and seen as vital to building a functioning economy in Afghanistan after four decades of war.

“This investment will be transformative for Afghanistan,” Sadat Naderi, chairperson and president of Afghanistan Gold and Minerals, said.

Poor security, rampant corruption and a lack of roads, power and other infrastructure, have hampered development of Afghanistan’s mining sector. The few major deals which have been signed, including the vast Mes Aynak copper project, signed with China’s state-run China Metallurgical Group, have so far remained largely inactive.

The involvement of Naderi, who served as urban development minister until June this year, has been criticised by campaigners, including Integrity Watch Afghanistan, which said it was a “clear breach” of rules barring former ministers from holding concessions after leaving office. Under Afghan law, ministers may not hold mining contracts for five years after leaving office.

Ikram Afzali, executive director of Integrity Watch Afghanistan and a member of the Mining Watch Afghanistan civil society group, said it would send a “very worrying signal” if some of the first major mining contracts it signed had question marks over them.

A spokesperson for the ministry of mining in Kabul rejected the criticisms, saying the deal was approved in 2012, before Naderi became a minister, and had been thoroughly vetted and approved. “These contracts have passed through all legal stages, there is no legal issue. We reject all criticism,” the spokesperson said.

Centar said the bidding project “followed a transparent, standards-based and competitive bidding process”.

The copper project in Balkhab district in Sar-e Pul is an early stage exploration project covering 500km², with development due to begin in early 2019, Centar said. The contract would run for 30 years and involve $56 million investment.

The second project, a gold mining operation in Badakhshan in northeastern Afghanistan, will explore and develop an area with known gold deposits that have long been exploited by artisanal miners. The project would also run for 30 years and involve investment of $22 million.