[Afghanistan Mining] How to Avoid the Resource Curse? Take Six Years to Approve Deals – by Eltaf Najafizada (Bloomberg News – November 7, 2018)


Afghanistan selected preferred bidders for three gold and copper mines in 2012. It took the war-torn nation six years to finally sign the contracts.

Afghan President Ashraf Ghani announced the deals in the past few weeks. The government took time to finalize the agreements because it wanted to ensure they were transparent and will help eliminate corruption in awarding contracts, Ghani said in an interview in his office in Kabul. After his election, Ghani ordered his administration to review 14 mineral and oil contracts that had stalled.

Harnessing “natural wealth around the world has been rarely successful. Most of the time it’s been called the curse of the natural resources,” Ghani, 69, said. “We were focused on avoiding this.”

The nation is losing mining revenue to militants and armed illegal miners. The large scale looting of the resources — which in 2010 the Pentagon said could be worth $1 trillion — and the country’s inability to secure the assets means Ghani’s government has to depend on aid from the U.S. and other nations to provide services to its citizens and fight insurgents. The administration raised just $92 million from the mining industry last year.

Afghanistan “disengaged” from contract negotiations in September 2013 because of the presidential election process but contacted the companies in July 2018 for re-negotiations, said Mansoor Sadat Naderi, a shareholder of Afghan Gold Minerals Company and Afghan-Turkish Mining Company, and an ex-Afghan minister of urban development and housing.

For the rest of this article: https://www.bloomberg.com/news/articles/2018-11-06/how-to-avoid-the-resource-curse-take-six-years-to-approve-deals