Afghanistan’s ruling Taliban government has disclosed in a statement that it signed a total of seven mining contracts amounting to $6.5 billion in investment, in the biggest such round of deals since seizing power two years ago.
Deputy Prime Minister for Economic Affairs Abdul Ghani Baradar Akhund, while giving details on the contract in a statement indicated that they would create thousands of jobs and significantly improve the economic situation of the country.
Meanwhile, the seven contracts are with locally based companies, many of whom have foreign partners in countries including China, Iran, and Turkey. They include the extraction and processing of iron ore, lead, zinc and gold in four provinces: Herat, Ghor, Logar and Takhar.
However, Javed Noorani, an expert in Afghanistan’s mining sector stated that any figures given for the deals could be misleading unless they lead to fully realized mining operations on the ground, which could take years.
“The Taliban know Afghanistan has minerals and this is cash, but it’s not easy cash. Mineral mining is an incredibly complicated operation. It requires a proper framework, strategies, institutions and infrastructure. You open up the sector slowly and start with low-hanging fruit.”Javed Noorani
Due to the nature of the contract, government appointees from the Ministry of Mines and Petroleum are not willing to disclose any further details on the contracts or the companies. The statement further disclosed that Kabul-based Sahil Middle East Mining & Logistics Ltd, signed an iron ore deal running into millions of dollars.
Courting Foreign Investment to Revitalize the Economy
The Taliban have been courting foreign investment to revitalize the economy since their takeover.
Nearly 80% of the previous, Western-backed Afghan government’s budget came from the international community. That money, now largely cut off, was used to finance hospitals, schools, factories and government ministries.
The Taliban, like previous administrations in Afghanistan, are pinning their hopes on the country’s vast and untapped mineral resources to line the nation’s coffers. Logar province is believed to hold the world’s largest copper deposit.
When the Taliban returned to power, over 38 million Afghans are suffering because of a few hundreds are in power. That suffering includes hunger driven by the fast-rising cost of food. The higher prices are the result of a perfect storm of declining currency values, high unemployment, and export restrictions on key products like wheat and sunflower oil due to the conflict in Ukraine.
However, the new mining contract will help the country alleviate poverty to some extent and boost the economy.