Afghan Gold Mining Project Approved
Source: Associated Press (12/14/10)
"Deal is the nation's first mining project backed by Western investors."
The deal is the first mining project in Afghanistan backed by private investors in the West. Afghan and U.S. officials hope many more deals will follow to help jump-start the economy of the impoverished nation in its 10 years of war.
"This project is an important step forward for Afghanistan's economic sovereignty," US deputy under secretary of defense Paul A Brinkley said. "It represents a turning point in the history of international investment into Afghanistan."
Mr. Brinkley, who directs the defense department's Task Force for Business and Stability Operations, said the gold mine deal is evidence that Western investors are showing confidence in Afghanistan's economic future.
About 10 investors—most of them from the US and Britain—are investing an estimated $50M in the gold project in Dushi district of Baghlan province.
Mr. Shahrani said he hoped that getting the deal approved by the Inter-Ministerial Council, which comprises the government's top finance and economic officials, would send a strong signal to global mining companies that there are investment opportunities in Afghanistan, especially in the mining sector.
Geologists have known for decades about Afghanistan's vast deposits of iron, copper, cobalt, gold and other prized minerals. In June, the U.S. Defence Department put a startling trillion dollar price tag on the reserves, but Mr. Shahrani called that a conservative estimate. He said he has seen geological assessments and industry reports estimating the nation's mineral wealth at three times that figure.
For Afghanistan, the minerals are a potential windfall, although formidable obstacles remain, including lack of investment, infrastructure and adequate security in most of the nation.
The Afghan government has also awarded its first private oil contract.