03/07/2013 02:49 pm ET

UK To Give $15 Million To Help Mine Afghanistan's Natural Resources

Prime Minister David Cameron said the United Kingdom will be giving $15 million in funding to help Afghanistan mine its estimated $1 trillion worth of copper, gold, oil, lithium and other natural resources, the U.K.'s Department For International Development said in a statement.

Speaking on Wednesday in London at a forum attended by U.K. investors and mining contractors, Cameron said the money would be given throughout the course of three years to provide general assistance to an industry that has enormous potential but a problematic history. The money is intended to provide assistance to Afghanistan's Mining Ministry and help the country attract international investors.

"Afghanistan is a vast mineral rich country but one that is essentially under-explored," said Wahidullah Shahrani, Afghanistan’s Minister of Mines, according to the government statement. "This work will continue to play a vital part in the overall recovery of our country for many years to come."

The tapping of Afghanistan's massive natural resources has hardly been started. It wasn't until 2010 that the extent of those resources were even discovered by the United States, when a small team of Pentagon officials and American geologists estimated the country's minerals were worth about $1 trillion, the New York Times reported. An internal Pentagon memo at the time called Afghanistan "the Saudi Arabia of lithium," referring to the valuable metal used in the batteries of laptops and smartphones, among other things.

But the beginnings of Afghanistan's mining industry have been fraught, to say the least. Ethnic rivalries, warring factions and competing international interests have led to a lack of transparency, corruption and violence, the Times notes.

One of the largest copper deposits in the world, for example, lies underground in Logar Province in Afghanistan, about 25 miles southeast of Kabul. If successfully mined, it has enormous potential ($100 billion by some estimates), but it has been mired in complications from its inception, when suspicions that the former Afghan Minister of Mines took a $30 million bribe to sell the contract to a Chinese company forced him to step down from his post.

Additionally, the huge copper deposits lie beneath a 2,600-year-old Buddhist monastery that many say should be preserved. For another, the mine is located in an insurgent stronghold where fear of jihadist attacks recently scared off the state-run Chinese company that paid $3 billion for it in 2007 -- the largest single foreign investment ever made in Afghanistan. The Taliban has apparently made blocking the mine one of its priorities.

All this is set to become more complicated next year, when NATO-led forces (including the U.S. and the U.K.) are scheduled to pull out of Afghanistan, ceding control to local agencies.

BBC international development correspondent David Loyn said Afghanistan should be careful not to repeat the history of other post-war nations, such as Africa, where large resources proved to be a curse.



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