Q. What is the importance of mining to Afghanistan’s future development?
A. Today, we are overwhelmingly dependent on world aid, but we are also aware that the current situation is unsustainable. The only way to stand on our own feet is to develop our natural resources. A century ago, Afghanistan’s location was seen as a liability. Now it is an asset, as most of our mineral extraction will go to major regional markets.
With the help of international agencies such as the World Bank, we have improved our legal framework in order to attract investment. For instance, when we are involved in large deals, we always appoint an independent monitor for the entire process to ensure the highest degree of transparency.
Q. How extensive are Afghanistan’s mineral resources and what is being done to develop them?
A. I can safely say that the potential is truly enormous. We estimate 16 billion barrels of oil and 5000 billion cubic metres of gas reserves, plus vast deposits of not just traditional minerals, but also strategic rare earth minerals such as cobalt and uranium waiting to be extracted.
Q. Investors are naturally concerned about the security situation. What is being done to address that problem?
A. We have a vigorous mining protection scheme administered by the interior ministry. We provide 100% security at the mine and headquarters, as well as in the transportation of people and commodities upon extraction. To give you an example, at the Aynak copper mine near Kabul [a $3bn Chinese project] there has not been a single security incident in four years.
Q. To what extent does Afghanistan stand to benefit economically from its mining industry?
A. By 2016 we expect government revenue from the extraction sector to be at least $1.5bn, compared with a mere $13m in the 2010/11 financial year. In four years’ time, the mining industry’s contribution is expected to rise to at least $5.5bn, roughly a quarter of projected GDP. This will also have a significant impact on employment, with the creation of an estimated 170,000 jobs when the current copper and iron mines are in production.
Q. How do you overcome the handicap of being a landlocked country with relatively few sources of power?
A. We have launched a national and regional resource corridors programme to address this problem. One aspect of this is the plan to build about 12,000 kilometres of railway line. We also have an aggressive hydroelectric programme in place to develop 23,000 megawatts of power. We will import from our central Asian neighbours at low cost, and we also have sizeable coal deposits with the potential to generate 1000 megawatts. Afghanistan also has large untapped natural gas deposits and the US Overseas Private Investment Corporation is building a 200-megawatt gas-fired plant.
Q. Apart from the infrastructure and power questions, investors are wary of the high level of corruption in the country.
A. Despite the negative perception in some quarters, Afghanistan’s regulatory framework and procedures are transparent and highly advanced. We put all tender deposits through an open bidding process and there is no requirement to give a percentage to a local partner, there are no foreign exchange or export restrictions, and big mining deals are monitored by the World Bank. In Afghanistan, as in any country, I would say that the earlycomers will reap the highest rewards.