By Abubakar Siddique
September 23, 2023
Radio Free Europe/Radio Liberty

The Taliban has been celebrating since the Islamist group that rules Afghanistan signed seven mining contracts promising to attract more than $6.5 billion in investments late last month.

But experts are skeptical about whether the contracts, signed on August 31 with Afghan-based companies aligned with foreign partners from China, Iran, Turkey, and Britain, can be implemented.

They question whether large-scale mining investments are even possible as the Taliban’s cash-strapped government remains unrecognized because of its extensive human rights abuses and its banning of women from schools, work and public life.

Illegitimacy

The Taliban’s lack of legitimacy also hangs over whether its accelerated efforts to boost mining revenue can deliver as a dire humanitarian crisis deepens in Afghanistan. Experts say few Afghans can benefit from opaque deals that circumvent established international standards.

“Large-scale development of Afghanistan’s mineral resources would take more capital than large firms are willing to commit in the absence of diplomatic recognition,” says Jeff Rigsby, a former U.S. military contractor and aid worker who lives in Kabul.

While looking for business opportunities in Afghanistan since 2022, Rigsby has closely followed the Taliban’s effort to exploit the country’s mineral resources.

“The Taliban has not always done due diligence in the past when [it’s] announced investment deals in other sectors,” he said. Rigsby added that little is known about the foreign firms signing the recent contracts to extract copper, gold, lead, zinc, and iron from several Afghan provinces.

“There is no transparency regarding these contracts,” noted Abdul Qadeer Mutfi, a former adviser to the Afghan Mining and Petroleum Ministry. “The Taliban wants to end the government’s financial problems by selling the minerals as raw materials to various countries.”

Mutfi said that Taliban mining contracts do not follow standard practices, which will deprive Kabul of international arbitration since the Taliban government is not recognized.

“Afghanistan might follow many African countries in experiencing a resource curse,” he said, alluding to the experience of several African nations in which large-scale exploitation of natural resources has not translated into growth and prosperity.

“After drugs, minerals are a significant source of funding conflict,” he said.

The Taliban, however, claims to be striving for self-sufficiency by developing the country’s natural resources. Its leaders have repeatedly projected mining, irrigation, and trade projects as a way out of the current economic and humanitarian crisis.

According to the UN, more than 30 million Afghans out of a total estimated population of 40 million need humanitarian assistance. With international funding declining, the world body has warned that millions of Afghans will not have enough food and that as many as 3 million face starvation.

Abundant Minerals

But Rigsby sees little Taliban success in developing new mines by pointing out that the extremist group has been exporting coal to Pakistan from existing mines and has revived an oil exploration deal with Chinese firms that the former pro-Western government in Kabul first concluded more than a decade ago.

In January, the Taliban government signed a contract with the Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) to invest $540 million until 2026 to explore oil and gas in Afghanistan’s northern Amu River basin. This revived a 2012 contract with the state-owned company China National Petroleum Corporation (CNPC).

Surveys estimating Afghanistan’s potential mineral resources to be worth more than $1 trillion generated a lot of headlines in 2010. But the accuracy of this estimate has recently been questioned. The country’s poor infrastructure, absence of advanced technology, a trained workforce, and the high cost of extraction remain significant obstacles.

Nevertheless, the country has vast deposits of iron, copper, coal, lithium, marble, chromite, cobalt, and gold. And, in addition to gas and petroleum, the mountainous country has large reservoirs of lapis lazuli and other gemstones.

Since returning to power two years ago, the cash-strapped Taliban has attempted to turn Afghanistan’s natural resources into a cash cow.

“From these investments you can imagine how many minerals we have and how they can boost our revenues,” said Shahbuddin Delawar, the Taliban’s mining and petroleum minister, after signing the deals on August 31.

He said in an interview that the Taliban government has so far concluded 116 small and 27 large mining contracts. He said during the last fiscal year, which ended in March, the government earned more than $220 million in mining revenue.

“The sale of minerals has increased because of transparency and an end to smuggling,” he told the BBC.

China

His upbeat assessment, however, is not backed by the evolving extractive industry on the ground. The Chinese state and private firms — who are one of the major international investors in Afghan mining — appear reluctant to begin working.

The China Metallurgical Group Corporation has yet to start a $2.83 billion contract for copper mining in the eastern Logar Province. The 30-year lease contract was signed in 2007. Taliban attempts to push the Chinese to begin underground mining to protect the vast Buddhist archaeological sites in the region have been unsuccessful.

“The Chinese presence here in the mining sector seems minimal, although some Chinese traders are exporting or smuggling minerals in small quantities,” noted Rigsby.

In a recent report, the research group Afghanistan Analyst Network concluded that the larger Chinese projects will take years to materialize.

“They will generate little immediate income for the ailing Afghan economy,” the report said.

Mutfi argues that in the absence of accountability, supervision, community engagement, and independent political and civil-society oversight, only Taliban leaders will benefit from exploiting Afghanistan’s natural resources.

“We are facing a significant loss,” he said.

Copyright (c) 2023. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave NW, Ste 400, Washington DC 20036.

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