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This is an archive article published on June 22, 2010

A goldmine or a minefield?

The discovery of extensive mineral deposits in Afghanistan may not be a boon for the country rather,as history suggests,a curse of plenty.

Lets suppose there is 1 trillion worth of minerals under Afghanistan,as senior American officials and a confidential Pentagon memo said last week.

Is that a good thingfor Afghanistan or maybe the US? Some experts in mining and in Third World resource politics argue that it is not. Because it takes up to 20 years for a mine to start earning profits and Afghanistan has been a battleground for 31 years,no mining company in its right mind would go into Afghanistan now, said Murray W. Hitzman,a professor of economic geology at the Colorado School of Mines.

The countrys underground treasure will be good for the warlords and for China,but not good for Afghans or the US, predicted Michael T. Klare,a professor of peace and world security studies at Hampshire College in Massachusetts.

History tends to second such scepticism. The great empires of the world were built thanks to gold mines,not atop them. Its the little mercantile nations with their cohesive political systems and fierce navies that have looted the big feudal ones paved with rubies.

Arid Spain and Portugal siphoned off South Americas gold; tiny Holland dominated vast Indonesia. Britain,barren except for coal,built an imperial swap shop of grain,lumber,cotton,tea,tobacco,opium,gems,silver and slaves. Japan conquered much of China for its iron and coal. Countries with a history of conflict have perverse effects from mineral wealth more war,more corruption,less democracy and more inequality, said Terry Lynn Karl,a political science professor at Stanford and the author of The Paradox of Plenty,which shows how the populations of poor countries like Nigeria often get poorer after oil is discovered and a tiny elite benefits.

It has long been known,geologists said,that Afghanistan has huge deposits of copper,iron,gold,cobalt and many other minerals,including lithium,an element vital to modern batteries.

Afghanistan,said Dr Klare,is more like eastern Congo: home to diamonds and coltananother element vital to modern electronics. Both are full of warring tribes,illiterate populations,corrupt governments and brutal warlords. And both are rugged and remote,far from coastlines and with few roads or railroads,making it hard to get minerals out and policing forces in.

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Rich as eastern Congo is,the lot of its population for the last 15 years has seen disease,starvation and massacres at the hands of local militias and invaders from Rwanda,Angola and Zimbabwe. Mozambique and Angola also illustrate the resource curse, said William S. K. Reno,a political science professor at Northwestern University.

Both were Portuguese colonies that fell into civil war after being freed in 1975. There was less to fight over in Mozambique,which had only cashews and shrimp to export,so the war was shorter. But in Angola,with the rebels holding the diamond mines and the government owning the oil,profits were squandered on tanks and jet fighters. The war lasted a decade longer.

Compared with those countries,Afghanistan is at disadvantage,mining experts said. Even for 1 trillion,its riches may not be worth digging up. Compared with oil drilling,minerals mining is extraordinarily expensive and time-consuming. As everyone has discovered especially BP,a bubblin crude can emerge under its own pressure as soon as the earths surface is pricked.

Gold,silver,copper and other minerals are usually locked in ore that must be tunneled down to,blasted out by the ton,carried to the surface,and ground into powder for processing. Digging the shafts and building elevators,processing plants,railroads and tarmac roads can cost hundreds of millions to billions for a single mining operation, said Roderick Eggert,director of the economics division at the Colorado School of Mines. Even a small gold mine is 100 million.

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And while an oil well can go from discovery to production in two or three years,it would take 5 to 15 years to go from where most of Afghanistan is now to an operating mine, he said.

After that,added his colleague Dr Hitzman,even with a good mine,it takes 5 to 10 years to recoup your investment. Whats Afghanistan going to be like in five years?

 

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