Posts Tagged copper

Afghanistan: Potential For A Mining Boom Splits Factions, Attacks Scare Chinese From Anyak

“If you were to pick a country that involves high risk in developing a new mining sector, Afghanistan is it,” said Eleanor Nichol, campaign leader at Global Witness, a group that tries to break the link between natural resources, corruption and conflict. “But the genie is out of the bottle.”

The part of this article that struck me was the illegal chromite mining and smuggling going on, thanks to the Haqqani network. If they think it is lucrative enough to do illegally, then there must be some money in it.  So any effort of the government to move in and secure those mines would be good. They could get a private company in there to extract it, they would deny the Haqqani’s that revenue, and it would get people working and earning a living.

And really, earning a living is what Afghans need– as noted in this quote:

At a store in the dusty bazaar, Shir Ali, 38, a gangly man who drives a minibus, says that with a job as a day laborer or security guard or driver, he could buy uniforms and textbooks to send all of his 12 children to school.
Sitting at the counter behind open sacks of rice and beans, the storekeeper, Daoud, 38, cracks his bronzed face with a smile, sharing the optimism but also the trepidation about whether at last his country can really make something of itself.
“If the mine doesn’t come, we will be like those people who live on treasure,” he said, “but they cannot use it.”

It will also require the services of private security companies and professionals who know how to operate in Afghanistan and navigate it’s complex ways. Mining operations require everything, from good roads to electricity to infrastructure to house miners and engineers, etc. They also need a viable way of getting that stuff out of the country, and all of this needs to be protected. Of course Afghans will be protecting a majority of this, but expats will be involved as well– to protect foreign companies from these Afghan protectors and insurgent/criminal attacks.

I say this because of the large spike of insider attacks and the infiltration of bad guys. The criminal/Taliban networks will all want their cut, or they will be attacking everything to make the point. Don’t forget about the Islamic extremists, and they will attack foreign infidel companies just for common practice. Companies must have a protective buffer in the form of expats in order to work in such a dangerous and complex environment.

The Afghan government must also come to terms with this reality, and if they want the revenue necessary to fund their military and police and services to the people, then they will have to do business with these foreign companies and meet in the middle. If those companies cannot trust your APPF force, or the local guards they contract with, then the government must know that it is either you allow these companies to bring in their own security–or they don’t come at all.

And like Daoud said,  “If the mine doesn’t come, we will be like those people who live on treasure,”. They will also be a poor and pissed off people, who will find no use in a government that cannot produce the conditions necessary for this foreign investment and involvement. No jobs equals protests–please note the Arab Spring…. No revenue means you cannot pay your soldiers or police, or properly secure the country. Get the picture Afghanistan?

To make this point very apparent, I posted a second article about the Chinese pulling their people out of the Anyak copper mining project. The Taliban are definitely targeting this operation to scare off the Chinese and put the hurt to the Afghan government. Here is a quote:

“We had meetings with them (the Chinese investors) and assured them these rocket attacks happen anywhere and they are not the direct targets. We had repeatedly meetings with them but could not make them confident,” Sardar Mohammad Sultani, acting deputy Minister of the Interior, told Reuters in his office.
“They left before any harm (was done to them). This was their own idea… It’s up to them if want to return or not,” said Sultani, in charge of the security force protecting the mine.
A spokesman for the consortium running Aynak, China Metallurgical Group (MCC) and Jiangxi Copper, confirmed some workers had been sent home indefinitely. It said unspecified “conditions” promised by the Afghan government in their contract had not been met…The threat is so severe that villages have warned the Afghan rights and anti-corruption monitor Integrity Watch Afghanistan (IWA) to stay away as they can no longer guarantee their safety.
IWA reported there are four armed groups operating in the Aynak area, some aiming to stop the project.
And the attacks are becoming more deadly. At the start of September, an assault on the protection unit killed 15 Afghan policemen, spreading fear among local and visiting workers…

 On another note, it looks like the Chinese will be getting into the game of training/funding/equipping Afghans. Enter the Private Security Dragon. lol

In a rare visit to Kabul this month by a top Chinese leader, bilateral deals on security were signed, including an agreement for police to be trained, funded and equipped with help from Beijing.
The government did not say whether the Chinese programme was aimed at boosting security around China’s oil and mining assets.

Interesting stuff, but Afghanistan can navigate this if they pull together and get serious about securing and controlling this stuff. They must secure this revenue source for the people, and do all they can to break this ‘resource curse’. –Matt

 

 

Potential for a Mining Boom Splits Factions in Afghanistan
By GRAHAM BOWLEY
September 8, 2012
If there is a road to a happy ending in Afghanistan, much of the path may run underground: in the trillion-dollar reservoir of natural resources — oil, gold, iron ore, copper, lithium and other minerals — that has brought hopes of a more self-sufficient country, if only the wealth can be wrested from blood-soaked soil.
But the wealth has inspired darker dreams as well. Officials and industry experts say the potential resource boom seems increasingly imperiled by corruption, violence and intrigue, and has put the Afghan government’s vulnerabilities on display.
It all comes at what is already a critically uncertain time here, with the impending departure of NATO troops in 2014 and old regional and ethnic rivalries resurfacing, raising concerns that the mineral wealth could become the fuel for civil conflict.
Powerful regional warlords and militant leaders are jockeying to widen their turf to include areas with mineral wealth, and the Taliban have begun to make murderous incursions into territory where development is planned. In the capital, Kabul, factional maneuvering is in full swing, including disputes over lucrative side contracts awarded to relatives of President Hamid Karzai.

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California: Increased Farm Thefts Plus Decrease In Police Forces, Equals Increase In PSC Use

Here is another example of the economy having an impact on how folks do business out there. Because there is less money for local law enforcement agencies to hire more officers, and because there are high prices for copper and/or food, thieves are targeting big farms. So these farms have no choice but to hire security. I imagine this is playing out in other economically depressed areas of the country as well, and we will see what else pops up. –Matt

 

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Afghanistan: U.S. Identifies Vast Riches Of Minerals In Afghanistan

     Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.

     For the geologists who are now scouring some of the most remote stretches of Afghanistan to complete the technical studies necessary before the international bidding process is begun, there is a growing sense that they are in the midst of one of the great discoveries of their careers.

  “On the ground, it’s very, very, promising,” Mr. Medlin said. “Actually, it’s pretty amazing.”

*****

     The “Saudi Arabia of Lithium”? Now that makes Afghanistan interesting.  I was aware of the copper deposits, and I have done a little research on gold and gems in Afghanistan, but this is new.  This Lithium find is a big deal and if Afghanistan can get it’s business in order, and actually come up with some mining capability, then they could stand to make a lot of money. This could be their ‘oil’. It could also be their curse, but hey, at least it is something.

     One other point I wanted to bring up was resource hungry China.  These guys are doing all they can to snag as many oil contracts in Iraq, and snag as many mining contracts in Afghanistan(copper).  I sure would like to see the West get into the mining game a little more aggressively there, seeing how we are the ones that have invested so much in this war. Interesting news. –Matt

Edit: 6/14/2010 – For a review on how important Lithium is, check out this story. The factors that will be driving Lithium demand, is our political relationship with Bolivia(which is sketchy at best), the Gulf oil spill and resulting energy policy focus on alternative energy, and our competition with China and the rest of the world over the stuff. That is what makes Afghanistan interesting right now.

Edit: 6/15/2010 – The plot thickens. It seems this news came out just before the mining auction for the Hajigak fields. The Asia Times story claims that the Pentagon wanted to drum up more competition for this auction, because China keeps winning mining contracts. Interesting.

Here is the piece of the story to look at:

The Pentagon memo may have been an effort to attract international interest in the mining sector before the auction in the next few weeks of the 1.8 billion-ton iron-ore field in Hajigak, which could be worth $5 billion to $6 billion, according to the British-based Times. The development of the country’s largest known iron deposit has been hampered by the war and weak institutions.

The memo coincided with a visit to India by Wahidullah Shahrani, the new Afghan minister of mines, to solicit bids for Hajigak after a planned tender was canceled last year because of a lack of international interest, the Times reported. Shahrani was appointed with US backing in January after his predecessor was sacked for allegedly taking bribes from a Chinese mining company – a charge he denies.

Afghan and Western officials want more companies to bid for Hajigak and other deposits to prevent China from gaining control over Afghanistan’s natural resources through bids subsidized heavily by Beijing, the Times said. American and European companies have alleged that underhand methods were used by Beijing to get contracts, it said.

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U.S. Identifies Vast Riches of Minerals in Afghanistan

By JAMES RISEN

June 13, 2010

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and Blackberries.

The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists. The Afghan government and President Hamid Karzai were recently briefed, American officials said.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

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