Peace in Afghanistan? Maybe—but a Minerals Rush Is Already Underway

Peace in Afghanistan? Maybe—but a Minerals Rush Is Already Underway

Peace in Afghanistan? Maybe—but a Minerals Rush Is Already Underway

And that rush is a direct result of Trump’s pressure on the Afghan government to open up the country to foreign corporations.


The Afghan war is the addiction that Washington can’t quit. The longest war in US history, it’s a conflict that has generally fallen out of Western media coverage, despite surging violence against civilians (though The New York Times is a rare outlet that documents it weekly). An average of 57 Afghan soldiers and police are killed every day, according to a leaked assessment by Afghan officials in 2018. Data from the US Air Force confirmed that the country was bombed more in 2018 by the Trump administration than at any time since the October 2001 US invasion—and Afghan civilians are dying at record rates.

Despite the increased US bombing—or perhaps because of it—the Taliban have strengthened their grip across the nation. The Kabul government tenuously controls barely more than 50 percent of Afghanistan’s districts, according to the US Special Inspector General for Afghan Reconstruction (SIGAR).

And despite the intense fighting, peace talks between the United States and the Taliban reached a new level of seriousness in early 2019, with the announcement that the broad outlines of a peace settlement had been reached; key elements include the removal of all US troops and guarantees by the Taliban that they will not tolerate international terrorist groups like Al Qaeda. Many Afghan women remain concerned, however, that their voices have been excluded from the process.

The US special envoy to Afghanistan, Zalmay Khalilzad, said late last year that he was “cautiously optimistic” a peace deal would be struck by April 2019, when the country’s presidential election was initially scheduled (it’s been delayed until July because of disarray after the October 2018 parliamentary vote).

While the war continues to rage in nearly every corner of Afghanistan, one issue barely investigated is the rush to mine valuable Afghan resources. I’ve been reporting on this subject since 2012, visiting Afghanistan twice for research, and the situation has never been so dire; massive contracts are being signed with little transparency or concern about the negative consequences for civilians. With $1–3 trillion of resources estimated to be under the ground, from rare-earth minerals to lithium and copper, the rush is on. It’s crucially relevant to current developments that Khalilzad, a neoconservative who served in senior roles in the George W. Bush administration, also worked with his son during the Obama years to exploit and profit from Afghan oil (though most of their plans failed). Khalilzad has done consulting work for oil companies, including Unocal in the 1990s, that were keen to develop a pipeline through Afghanistan during the period of Taliban rule.

The minerals rush is a direct result of the Trump administration’s active pressure on Afghan President Ashraf Ghani to open up his country to foreign mining corporations. A surging civil war and chronic government corruption, among other ills, have apparently not dampened Washington’s desire to generate revenues from the never-ending conflict. President Trump views it as perhaps the only reason to keep US forces in Afghanistan. He has argued that such investment could help the US economy, secure jobs, and challenge China’s dominance in the global rare-earth market.

This is one of many reversals by Trump. During the 2016 presidential campaign, he was frequently skeptical about US military interventions. But after taking office, he increased the number of US troops in Afghanistan to around 14,000. Recently, though, he surprised even his own advisers by announcing a troop drawdown of around 7,000.

There’s been no discussion in the peace talks of the country’s prized natural resources and who would exploit them if the war ends. A senior Afghan government source in Kabul tells me that he believes any peace agreement is unlikely to force all US assets to leave because Washington won’t tolerate the country’s being controlled by Iran, Pakistan, China or Russia.

When Ghani met Trump in September 2017, he agreed to a “compact” that included a number of Afghan commitments, such as the signing of mining contracts that would give beneficial treatment to US companies. The White House statement after the event explained the rationale: “Such initiatives would help American companies develop materials critical to national security while growing Afghanistan’s economy and creating new jobs in both countries, therefore defraying some of the costs of United States assistance as Afghans become more self-reliant.”

Both Presidents George W. Bush and Barack Obama pushed mining on a country that wasn’t equipped to manage it; now the Trump administration has accelerated efforts to exploit Afghanistan’s natural resources. The Commerce Department and the United States Geological Survey visited Kabul in late 2017 to assess the viability of large-scale mining. They viewed the resources map archive, originally developed by Soviet geologists during their occupation in the late 1970s and ’80s, to understand the diversity and amount of minerals. According to The Daily Beast, the USGS signed an agreement with the Afghan government in early 2019 to assist in the development of the mining sector, proving that Washington has plans to remain in the country for a long time.

Sources in Kabul and Europe confirm that there are real prospects of increased violence if more mining contracts are signed in areas controlled by the Taliban or other insurgent groups like ISIS, which has gained ground recently in some provinces. The Ghani government is moving ahead regardless, without having consulted locals in targeted areas.

Blackwater founder Erik Prince is in the mix. He visited Kabul twice last year (I obtained evidence that the Afghan security company arranging his visits said he was coming as “Trump’s adviser”) and met senior Afghan government ministers to discuss a number of potential mining contracts in gold, gas, and lithium. Prince’s company, Frontier Services Group, has opened an office in the heart of Kabul. When the global broadcaster TRT World asked Prince recently about my revelations regarding his plans, he didn’t refute any of them. (Early this year, Prince announced that he was launching a $500 million fund to invest in minerals used in electric-car batteries, including cobalt and lithium from Africa and Asia.)

Although Prince has touted his scheme to privatize the Afghan war, an idea currently rejected by Trump, his goals are far more extensive. That’s why he’s supporting Ghani’s political opponents: The Afghan president is a vocal critic of Prince (though some of his advisers back the Blackwater founder). The Afghan government released a statement in October that read, in part, “Under no circumstances will the Afghan government and people allow the counterterrorism fight to become a private, for-profit business.” In the murky world of Afghan politics, where political opponents are routinely targeted, Prince views such alliances as financially sound.

The presence of a scandal-plagued mercenary and investor like Prince would be bad enough, but the situation is much graver than that. The Nation has obtained a series of documents written by a senior source in the Afghan bureaucracy with years of experience in the country’s mining sector and close ties to President Ghani. The files, which have never been publicly released, reveal the dangers of increased minerals exploitation and warn the president that corruption is now rampant in the industry.

The documents were sent to a close associate of Ghani, and the source tells me that Ghani regularly used his talking points in meetings after seeing them. The documents paint a picture of potential and actual corruption within the Afghan Ministry of Mines and Petroleum (MoMP), which is led by Nargis Nehan. One of them, written soon after Trump was elected, explains that the Afghan “political elite is seeking rent from the potential of the extractive industries through development of new networks which include shadow actors and characters who oppose the emergence of a strong state in Afghanistan. Among the actors who are doing a lot of damage [are] active and former diplomats turning into lobby[ists] for junior mining companies.”

The file lists former Afghan ambassadors to the United States and Canada, along with the former Afghan consul general in Ottawa, pointing out that “diplomats are turning into businessmen in [their] quest to join the political elite group.” Making matters worse, it continues, “cash-drained and fatigued [foreign] donors have occupied important space to push and engineer decisions on the [mining] sector without reading [i.e., understanding] the chaos [it would create].”

The United States Agency for International Development (USAID) hosted a large meeting in Kabul in February 2018 to “support greater participation in the mining sector.” US Ambassador to Afghanistan John Bass said that “developing Afghanistan’s mining sector provides great potential for employment and economic growth.” USAID refused to release a guest list for the event.

Another document sent to Ghani raises many concerns about Minister Nehan and the ways in which her department allocates mining contracts. It alleges that favored companies are given exclusive access to win contracts, especially in the talc sector (talc is a valuable mineral for Western markets; the United States and European Union are the world’s biggest customers, and use it to make everything from paints to plastics). The document claims that Core Drillers and Natural Stone, two Afghan companies with strong US connections, won contracts even though there was evidence that some of the participants had been involved in the illegal extraction of talc for decades. The NGO Global Witness released a report last May that outlined how talc was fueling the insurgency, including the Taliban and ISIS, in Nangarhar province.

An Afghan mining source recently visited the Afghanistan-Pakistan border under cover and witnessed hundreds of trucks carrying illegally obtained coal, talc, and lapis into Pakistan. He told me that coal transport was controlled by Iran-backed Afghan warlords—the same warlords who have formed Afghan Shiite militias that fight in Syria on the side of the Assad regime.

The talc is traded and sold by mafia groups tied to Pakistani dealers, but the product is ultimately destined for Europe and the United States. The lapis trade is controlled by Afghan warlords, with members of Parliament and figures close to President Ghani complicit in this massive robbery worth billions of dollars every year.

Another document seen by Ghani further suggests that Afghan members of Parliament have been operating mines for years without paying any taxes. The writer of the document claimed to have intimate knowledge that mining companies were bribing senior ministers. The document further detailed that evidence showed how Afghan mining corporations paid US dollars to MoMP officials to ensure that contracts would be approved.

The corruption doesn’t end there: A 2017 report from the United States Institute of Peace pointed out that Afghan politicians routinely avoid paying taxes or royalties on their illegally run mines. This January, Afghanistan was suspended from the Extractive Industries Transparency Initiative, a global mechanism for good governance in the oil, gas, and mineral sectors, because of consistent failures in fully implementing its recommendations.

Another file sent to Ghani lists close to 50 mine sites around the country, operating both legally and illegally, the vast majority of them labeled “insecure” and prone to insurgent attacks or instability arising from corruption and poverty.

According to a 2015 report by the Afghanistan Natural Resources Oversight Network, there are more than 2,000 sites run by smugglers or insurgents without licenses or oversight.

In another document written by the Afghan mining expert, Ghani was informed about the role of Adam Smith International (ASI), a British-based free-market consultancy that’s one of the UK’s biggest foreign-aid contractors. The company, which has been in Afghanistan since 2002, assists in the development of the mining sector. In a damning 2017 report by British parliamentarians, ASI was accused of ethical breaches; as a result, the UK government cut its £268 million budget (though the company was once again able to bid on contracts from early 2018, after the British government’s International Development Committee found most of the claims false while noting that ASI “acted improperly”). Focused on privatization instead of state-backed infrastructure, ASI helped draft Afghanistan’s flawed 2014 Minerals Law, which left the sector open to corruption.

I asked Afghan Mining Minister Nehan a number of questions about her management of the department and about accusations of favoritism and corruption. She told me that she had a seven-year plan to modernize the mining sector, which included minimizing “illegal mining activities” and improving “contract and revenue management.” She denied any wrongdoing, accused her critics of being “not well supported by verified information and documents,” and praised her department for pushing through contracts that had been stalled for years.

“In a country going through decades of conflict, there are critics and lack of confidence due to weak governance,” Nehan said. “But as the acting Minister of Mines and Petroleum, all my decisions have followed due process and I am ready to be held accountable.”

Nehan’s vision for the Afghan mining sector is a “responsible, equitable, and balanced development of Afghanistan’s extractive sector in order to ensure the benefits of the natural resources serve the interests of Afghan people for generations to come.” Despite the violence and corruption, she opposed stopping mining activities, because then the “natural resources of Afghanistan will remain the second revenue source for the insurgents.”

She said that Afghanistan had to be “self-reliant by 2024” (this refers to a 2011 agreement in which the international community pledged to contribute substantial assistance until that year) and therefore “development of the sector is a high priority since it not only generates revenue but also creates thousands of direct and indirect jobs…and reduces the income of illegal miners [e.g., insurgents] while adding to state revenue.”

It wasn’t until September 2018 that the Ghani government announced major new mining contracts, after years of delay. One was granted to the Afghan-registered Silk Road Mining & Development company, which signed a deal to exploit copper in western Herat province. The company’s CEO, Asia-based Christopher Logan, tweeted that “after 7 years and considerable work from Gov’t of Afghanistan and Silk Road Mining, we signed the 1st large scale mineral development contract in the country. Our Shaida copper project will become the cornerstone of a new professional, sustainable mining sector in Afghanistan.”

Silk Road Mining will have to manage security around the mine in an area beset with increasing violence. In the past, this has often meant paying insurgents not to target the company’s employees and hiring private security companies to quash any civilian opposition. It was generally a recipe for increased violence.

Stephen Carter, the Global Witness Afghanistan campaign leader, told me that his organization had raised concerns about the Shaida copper project and spoken to both the Afghan government and Silk Road. Carter said that there weren’t any obvious “red flags” in the contract, and the firm presented a moderately plausible claim that it knew how to bring in the “right expertise” to successfully manage it.

This was the second major copper contract awarded to a private company, after the troubled Mes Aynak site in Logar province—which has seen heavy insurgent activity—was granted to a Chinese firm in 2007. I visited the area in 2015 and found civilians cowering in fear, with barely any services or support from either the Kabul government or the Chinese company. Many of the local men were on the verge of joining the insurgency in frustration.

The worrying history of the large lapis mine in northeastern Badakhshan province  should serve as a warning. Opened in 2014 with high hopes of bringing in much-needed revenue for the government, within 21 days it was taken over by a militia supported by factions in the Afghan political elite. The Taliban and militia shared the profits from the mine.

The biggest mining contracts signed by the Ghani government occurred recently after intense pressure from the Trump administration (and not long after troubling amendments were made to Afghanistan’s Minerals Law that included lessening anti-corruption measures and ignoring the rights of local communities). A Kabul-based mining source, who wrote the documents seen by the Afghan president, told me that Ghani had read the files he’d written and pledged not to sign any contracts because of their inconsistencies and other problems. But that recently changed, because “what he [Ghani] perceived to be the broader goals to stabilize Afghanistan”—pleasing Trump and needing US troops to fight a raging insurgency—forced his hand. The mining source said that the US and UK embassies, along with the World Bank, had pressured Ghani and Mining Minister Nehan.

Two contracts were signed in October for copper and gold exploration in the north of the country. The Badakhshan and Balkhab district mining contracts sparked immediate opposition from civil-society groups in Afghanistan and around the world. Global Witness, Mining Watch Afghanistan, and Afghanistan’s Environmental & Natural Resources Monitoring Network released a public letter to Ghani in late November that explained why he should reverse his decision:

Our major concern is that the contracts appear to be in clear breach of Article 16.5 of the 2014 Minerals law, which bars former Ministers from obtaining a contract for 5 years after leaving office. Mr. Sadat Naderi, who until June 2018 was minister for Urban Development, has a 51% stake in the Balkhab contract, and a 25% stake in the Badakhshan contract…. we understand that the government’s most recent and complete legal advice also took this view—raising the question of why this was not acted on.

Javed Noorani, who has been a Kabul-based researcher on the mining sector for over a decade and is a member of the Monitoring Network, told me that President Ghani is under pressure to sign new mining contracts, which “will be a recipe for mismanagement of the sector and will worsen the situation.”

Noorani said that Afghanistan was in a very fragile condition and should not be pressured by Trump to further exploit its resources. “If I were the [Afghan] president, I would give myself the time to create political consensus and develop a vision for the sector,” he said. “The president is put under pressure to sign more contracts. Those who want the government to sign more contracts know that it has not been in a position to manage the already-signed ones.”

“Among the three major parties, the state, insurgents, and warlords,” he added, “the government has collected the least amount of rent from the sector. I would contract mines once I have a sound legal base and well-coordinated institutions to manage the contracts better so that they are peace-productive rather than conflict-productive.”

Washington has pursued mining options in Afghanistan since the era of President George W. Bush, but success has been elusive. A 2016 report by SIGAR, the US special inspector general, found that Washington had spent $488 million to kick-start the sector, with no positive outcomes. Corruption, instability, violence, and poor or nonexistent planning all contributed to the failures.

USAID and the Defense Department supported the plans, but achieved next to nothing. A $43 million gas station, which supplied compressed natural gas and should have cost $500,000, was viewed as one of the few successes—despite the fact that most cars in Afghanistan run on diesel or petrol.

Carter of Global Witness told me that his organization had concerns about any pressure the Trump administration might exert on Kabul to expedite mining contracts and award US companies, though he had seen no “blatant, inappropriate pressure.” Carter said that the mining sector could help with Afghanistan’s economic development if the country’s governance issues were seriously addressed. In the current political climate, this is highly unlikely.

The Soviet Union was quick to see the potential of Afghan resources soon after that country’s 1979 invasion. Analyses from the early 1980s suggested that Moscow occupied Afghanistan in part to gain valuable minerals. Journalist Edward Girardet, writing in 1982 for The Christian Science Monitor, argued that “the Soviet Union’s exploitation of Afghanistan’s natural resources has amounted to nothing less than economic pillage.” He estimated that it “contributes heavily toward subsidizing its estimated $3-$4 million a day military occupation costs.”

The Soviets focused on copper, natural gas, oil, and uranium, but US-supported insurgents routinely interrupted the work of extracting them. The Afghans themselves, wrote Girardet, “have to make do with coal and charcoal. By the end of 1980, reportedly not a single cubic meter of gas was being used in Afghanistan itself.”

History could be repeating itself. To discuss mining options, Trump or his senior aides have met with Michael Silver, the head of American Elements, a chemicals and rare-earth minerals company, along with Stephen Feinberg, whose private-equity fund, Cerberus Capital Management, owns the large military contractor DynCorp, which has been involved in Afghanistan for years. DynCorp has countless scandals to its name, including widespread allegations that the company’s employees hired young “dancing boys” in Afghanistan and ran a sex-slavery operation in Bosnia in 1999.

It seems unlikely that the Taliban or other insurgent groups will take control of the whole country, at least anytime soon; international military forces will probably protect Kabul from that outcome. Even so, it’s hard to imagine a peace agreement leaving Afghanistan in the hands of forces determined to protect the best interests of the Afghan people. Exploitation of the country’s resources seems destined to further inflame an already unstable climate. The Trump administration likely knows this but doesn’t care, so long as American companies are making a profit.

Clarification: We have amended the passage discussing the British organization Adam Smith International to note that it is a consultancy rather than a think tank, and that it was cleared of most of the charges leveled against it in a 2017 UK parliamentary report. Another paragraph discussing additional allegations against ASI was removed.

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