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<div bgcolor="#FFFFFF"><font face="Verdana"><b>THE WISDOM FUND<br>TWF.org</b></font><font face="Verdana"><br><br><br>June 14, 2010<br>Times Online <br><br></font><font size="5" face="Verdana"><b>Value of Afghanistans mineral discovery needs to be dealt with cautiously</b></font><font face="Verdana"> <br>
By David Robertson, Business Correspondent<br><br><br>The good news from the men at the Pentagon is that beneath the landmines Afghanistan is sitting on a goldmine.<br><br>Exactly when they took their degrees in geology is unclear but officials have estimated that Afghanistans mineral resources could be worth $1 trillion.<br>
<br>This suspiciously round number appears to be based on geological surveys made decades ago as well as recent on-the-ground research.<br><br>How thorough that could have been is open to debate, given that it takes the worlds best miners about a decade to explore a new area.<br>
<br>Factor in Afghanistans size, and the Pentagon must have had an army of geologists working in the country since immediately after 9/11 to have accurately studied its terrain.<br><br></font><font face="Verdana"><b>The $1 trillion figure is, therefore, highly misleading. It is a theoretical number and may have little relation to the value of resources that could actually be exploited.<br>
</b></font><font face="Verdana"><br>After all, you can dig up any garden in the UK and find copper, iron and all manner of other metals and minerals. The North Sea alone contains an estimated $207 billion of gold.<br><br>
The difference between a British garden and the vast mines of Australia and South Africa is that minerals and metals are found there in quantities and concentrations that make it economical to extract.<br><br>It will be of little benefit to Afghanistan if its $1 trillion of mineral resources would cost $2 trillion to dig up.<br>
<br>The Americans have also made an error in publicising this guesstimate of Afghanistans mineral wealth because it will raise expectations and thereby inflate future facilitation payments.<br><br>It is an unwritten rule among mining companies that you never get too specific about the potential value of deposits in developing countries as it only serves to inflate the bribes that are requested.<br>
<br>Afghanistans former Minister of Mines has already been accused by the Americans of receiving a $30 million bribe to allocate mining licences.<br><br>Even if there were $1 trillion of mineral resources in Afghanistan, and even if those resources were economically viable, it would be years before a large Western miner considered going anywhere near the country.<br>
<br>BHP Billiton, Rio Tinto, Xstrata and Anglo American the worlds largest miners have no intention of moving into Afghanistan because the risk is far greater than the reward.<br><br>It would cost $5 billion or more to develop a large copper, iron ore or gold mine in Afghanistan and potentially a further $5 billion to build the necessary infrastructure (roads, railways, etc).<br>
<br>No company will risk that sort of money in a country where the Government does not control all the territory and contract law is far from solid.<br><br>The only people to have shown an interest in Afghanistans mines so far are the Chinese because, unlike a private company, they can tie agreements to foreign aid, loans and arms deals things that Kabul will not want to renege on.<br>
<br>It is possible that Chinas grab for Afghan resources has prompted the Pentagons attempt to generate some interest from the rest of the world in the countrys resources.<br><br>The Americans might not like the idea of someone else benefiting from its military commitment to Afghanistan but Chinese mines might still be preferable to poppy fields.<br>
<br><br>---<br>June 15, 2010<br>Asia Times Online<br><br></font><font size="5" face="Verdana"><b>Pentagon strikes it rich</b></font><font face="Verdana"><br>Jim Lobe<br><br>The timing of the publication of a major New York Times story on the vast untapped mineral wealth that lies beneath Afghanistan's soil is raising major questions about the intent of the Pentagon, . . . </font><font face="Verdana"><b>some analysts believe the front-page article is designed to reverse growing public sentiment that the war is not worth the cost</b></font><font face="Verdana">. . . .</font><font face="Arial"><br>
</font><font face="Verdana"><br>As noted by Blake Hounshell, managing editor at Foreign Policy magazine, the U.S. Geological Service (USGS) already published a comprehensive inventory of Afghanistan's non-oil mineral resources on the Internet in 2007, as did the British Geological Survey. Much of their work was based on explorations and surveys undertaken by the Soviet Union during its occupation of Afghanistan during the 1980s. . . .<br>
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