THE BLOG

Mineral Prospects Should Spur Peace, Not Conflict, in Afghanistan

Despite a nine-year conflict and the current military surge by the U.S. and NATO, Afghanistan has taken foundational steps since 2009 to turn its mineral and hydrocarbon resources into sustainable national wealth, adopting a new hydrocarbons law and formally agreeing to implement the Extractive Industries Transparency Initiative.

The stakes rose this week with reports of mineral discoveries on a scale that could transform Afghanistan into a significant mining center. Deposits identified include iron, copper, cobalt, gold and lithium, among other metals.

The prospect of a trillion dollar mining industry should be an incentive for Afghanistan's government, people and allies to work even harder for stability. This means accelerating not only the drive for security, but also the development of enforceable mining regulations and an overhaul of the Ministry of Mines, which is hobbled by inadequate mechanisms for transparency and accountability.

Afghanistan's mineral potential has attracted international attention since 2008, when the government finalized a contract with a Chinese company to develop the Aynak copper mine near Kabul. But serious political and environmental risks surround the project, and information provided to the communities near Aynak to date has been limited and contradictory. Development is two years behind schedule and officials should move now to ensure that local communities are involved in project decisions and well-informed through the disclosure of all major planning and operational documents.

The Aynak project -- worth an estimated 88 billion dollars -- gives leaders, companies, citizens and the international community a chance to carve out a model of sound governance and disclosure practices before the extraction phase begins, and before excitement over newfound wealth leads to bad deals that ignore the long-term economic good of the country.

The 2009 hydrocarbons law improved transparency and environmental protections and also included a model hydrocarbons contract. Afghanistan can build on this progress by establishing new operational, administrative and enforcement procedures for the sector. The government of Norway has provided considerable technical assistance to Afghan leaders on legal reforms, and extensive international experience in resource governance is also available from Australia, Liberia and Mongolia, among others.

Afghanistan gained a tool for building stability when it committed to implement the voluntary standards in the Extractive Industries Transparency Initiative (EITI), but the country should follow the example of Liberia and extend industry governance reforms beyond revenue transparency to address questions of conflict, private sector development and environmental impact. Liberia's recent civil wars and the continuing crises in the Democratic Republic of the Congo are just two examples of the devastating effect of resource wealth amid national conflict. Last week's New York Times report that U.S. intelligence has uncovered widespread corruption among Afghan officials and contractors (not a surprise) underscores the need to build strong safeguards into the extractive sector now, before a mining boom begins.

The mining windfall suggested by new geological reports may be several years away. Enacting strong transparency and accountability rules now will reduce the risk that corruption, conflict and weak governance will stunt the growth of a sector that could become Afghanistan's strongest foundation for development.