Monday, June 14, 2010

AFG mineral wealth? Take a breath ...

Everyone just relax, we have heard this before in the 1970s; just more details now.
Government officials sounded headily optimistic Monday as they fielded questions from local and international reporters about a new report on the extent of Afghanistan’s mineral wealth that suggests considerable potential for products other than opium, which until now has been the country’s most lucrative export.

The report, produced by the American military and the United States Geological Survey, found that Afghanistan had at least $1 trillion in mineral wealth.

In a news conference primarily with Afghan reporters, President Hamid Karzai’s spokesman, Waheed Omar, called the report “the best news we have had over many years in Afghanistan.”

“The Afghan government is actively looking to its Ministry of Mines, to its Ministry of Commerce and to other entities in the Afghan government to start to bring these to the benefit of the Afghan people,” he said.

As they waited to hear Mr. Karzai’s spokesman, some Afghan reporters excitedly calculated among themselves how much each Afghan would theoretically get if the mineral treasure trove were divided equally. Assuming the $1 trillion valuation and Afghanistan’s population of 29 million, that would give each Afghan man, woman and child $34,482.76.
I am sure that there is a few trillion dollars worth of minerals on Mars as well - but you cannot economically get it to market. First things first.

Without a safe and secure environment - not of this means anything. Without a safe and secure environment, you cannot safely get labor and equipment to mine the minerals. Without it you cannot get the product out of the country.

Without the rule of law, you cannot safely assume that you will be allowed the results of your investment. Any profit will be bled out through corruption and confiscation.

Mineral wealth is infrastructure heavy. AFG does not have a rail network. It does not have an effective road network that can handle anything more than jingle trucks.

All the above are just the first few economic facts. Here is your thumbnail sketch;

- Safe and Secure Environment (SASE): 10 years.
- Rule of law: 15 years - within a reasonable degree, though not to Western standards.
- Substantial infrastructure: 5 years after SASE.

Then you have to get it to markets.

The Dutch are leaving now. The Canadians next year. President Obama wants us to go home starting in 2011 (though everyone from SECDEF on down just wink at you and nod their head - I hope they are correct).

Don't get caught up in the hype. This is WAY down the road, if ever. Don't get distracted. Focus on what is real.


Redeye80 said...

Let's not forget 90-95% of the worlds opium comes from AFG.  When it comes time for the harvest everyone gets involved because everyone get a piece of the pie.  So, in a supposed third world country, how it is the one cash crop gets to market?  Everyone cooperates.

So, once you get past the ability to get the mineral wealth out of the ground, I see the profit potential for EVERYONE to make the enterprise viable.

Money talks, I'll bet it will happen faster than you think.

mark said...

The PRC will make things happen.  The west and russians mix politics with money and a hefty dose of the old ultra violence.  The Chinese will ignore politics, grease the right palms, and put down those in the way of a peaceful return to their investment.  Shame it is: their method will work, some roads will be built, rail ties when possible, and the resources willl be developed.

Skippy-san said...

Double all of your time estimates-this is Afghanistan after all. Plus this is not new news.

DeltaBravo said...

I think "news" like this is to remind the generation that didn't hear about what's under the dirt under their feet that there is more possibility than growing poppies.  If you can get the people thinking in a different direction.... vast wealth... development... or if you can get the "right people" thinking in a new direction, the rest will follow....

Redeye80 said...


Anonymous said...

hmm btw   PRC even borders AFG, why not sell the whole country to them?

Grandpa Bluewater said...

General Crook? General Grant, line 2, something about gold and  Apache indians in the Arizona Territory, sir.

Grandpa Bluewater said...

OH, sorry, that was yesterday's call.

Navy Suppo said...

Calling AFGH a 3rd world country does a disservice to all of the other more advanced 3rd world countries.  AFGH fall intoa  5th or 6th world country by any standard.  The thought of mining anything that isn't grown on the surface of their land (poppies) is fantasy in the year 2010 or anytime in the forseeable future.  US should run away from that idea now and forever more.

butch said...

The average Afghani will see squat.

The oligarchs wil cut deals with China (rail line to China, anyone?), anf the PRC will do what needs to be done to stabilize the country with nary a peep from the international community.

Meh, the meteors can't arrive soon enough.

ewok40k said...

Wasn't that Custer sent to explore gold in the Black Hills?