Untapped mineral deposits in Afghanistan
The NYT reports a new status for Afghanistan’s future if accurate:
The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.
The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.
An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and Blackberries.
Update: hat tip Naked Capitalism for the fact that this ‘find’ was reported in February here.
Update 2: Andrew Grantham reports copper mining to include a railway to China in 2008. And one Bloomberg update on rail progress to ‘extract’ copper to markets if the resource is to be more than just potential.
Update 3: There are at present no railroads to China, although one was commissioned 2008. And the dream of a route for both trade from Afghanistan and a route for Central Asian oil/gas to a city like Gwadar (see rdan in 2007) in the south through Balochistan has gone nowhere.
Believe it or not, this would be bad, not good, for Afghanistan. Name one country that relies on natural resources for its wealth that is well run and treats its citizens well. I can’t think of one. The Democratic Republic of Congo, most of the oil countries in the middle east, and South Africa come to mind. Still, even mining probably beats growing heroin as a source of revenue. But the more revenue the Afghan government raises, the more corrupt it is likely to become.
Nothing like a mining boom to warm the cockles of the hearts of imperialists. Ask the natives in New Guinea and Africa how much they have profited from their mineral wealth.
While this should be good news for Aghans, there is no possibility that corrupt shambles that is the Karzai government is going to develop natural resources in any way that is remotely beneficial to ordinary Afghans. Could the Taliban do better? Being a bit more disciplined and by reputation margnially less corrupt, they might. But probably not.by enough to matter.
Afghan minerals are not likely to be developed any time soon. And certainly not to the benefit of ordinary Afghans.
And in any case, these minerals are likely going to end up in East Asia, not the US. China has a border with Afghanistan. Just as the moronic invasion of Iraq has failed to produce any significant amout of crude oil for import to the US, the mines of Afghanistan probably will yield little of economic benefit to the US.
BTW, What good are industrial minerals to the US, if our industrial policy consists of shipping any industrial job that somehow gets created overseas as quickly as is possible?
So the green economy seems to be a lot like the oil economy; i.e. heavily dependent on non-renwable resources and military domination.
The only plus – there is less of a chance the U.S. will bother destabilizing Bolivia over lithium.
That $ 1 trillion number is a little off.
They’re using the value of the materials produced….without including the costs of producing them. $400 billion in iron ore? Umm, anyone want to talk about who is actually going to use it? The transport costs of a low value (under $100 a tonne) and bulky item from a landlocked country in the mountains?
$80 billion in niobium? That’s between 250 and 600 years (depends upon which year you take) of US consumption. You can’t bring that amount of material to market and get anything like current price for it.
There may well be some very nice mineral deposits there but that $1 trillion is gross, not net, not even gross margin.
Name one country that relies on natural resources for its wealth that is well run and treats its citizens well.
Norway. What do I win?
It doesn’t matter that much where the resources are going. It’d be nice if domestic interests got first crack at the rents, but any supply serves to lower prices and improve our access, if only indirectly.
A trillion dollars of new wealth available for the taking is pretty sweet. It’s about 30 years of California’s ag product.
I should have forwarded this to you first Tim.
That’s a good point Tim. It’s not all that clear how the minerals are valued. Further the assessment seems to be based largely on arial surveys without a lot of boots on the ground investigation of the actual recoverability of the minerals. I share your skepticism about Iron. The world isn’t that short of it and getting it out of Afgranistan is going to require no small amount of energy resources. But Copper is one of the resources cited, and many of the world’s copper mines are in places at least as unpromising.
I’m curious where you got the $400 billion number for Iron. It’s not in the NYT article that I can see and I don’t see any promising links to more information there either.
***A trillion dollars of new wealth available for the taking is pretty sweet. It’s about 30 years of California’s ag product.***
It’s the taking part that is the problem. In the unlikely event that something vaguely resembling peace breaks out in Afghanistan, everyone for 1000s of kilometers around (except maybe the Nepalese) is likely going to set out to take it. And the Afghans most likely are not going to take that well. The resull make for a lot of great shoot em up movies and bad novels. But it is going to be hard on the folks who live there who already have — IMHO — more than enough problems.
It’s also well to keep in mind that these are in no way shape or form our assets and that we Americans are not well loved in that part of the world.
***Norway. What do I win?***
Technically, I suppose not. The question was about countries that depend on natural resources for their wealth and over half of Norway’s economy is services. But yes the North Sea oil countries have handled their oil windfall well. As have the UAE. And Libya notwithstanding being run by a ‘brother leader and guide to the revolution’ who is almost certainly literally certifiablle (but kind of well meaning in a Lewis Carrollian sort of way). Nauru tried to handle its phosphate windfall responsibly only to be screwed by generation of bankers/shysters prior to the current bunch of pirates.
But none of those countries have a government that comes close to that of Afghanistan on the dysfunctionality scale.
well, the good old US of A. unless you emphasize “relies.” We could be optimistic and hope that a little bit of resources would form the core of a real economy. But it is, alas, all a question of the leadership. For example, a once resource rich, developed economy, close to home, seems bent on turning itself into a banana republic.
your analysis seems to depend on “getting it out.” who knows, maybe they’ll find a local use for it.
My first though was to wonder who and why someone leaked this info just now.
As long as the country is as unsettled as it is now this mineral wealth probably has zero value.
Of course, a trillion in market value needs to consider who gets paid from the trillion to “get it to market”.
The US taxpayer has been “investing” $13B per month for the past some many years to keep Afghanistan open for the taking. The setting up a Muslim version of “town hall meeting” democracy is not going so well.
A trillion is less than 7 years’ US occupation to keep the place open. UShas already lost that much on the game in Afghanistan.
The only worse deal for the US taxpayer is keeping the Persian Gulf open for oil delivered to our creditors Japan and China who lend the US the money to keep their oil cheap and delivered on time.
ilsm will not change.
On the rare earth elements the US has the reserves its just that the chinese undercut the US on price so the mines closed (see mountian pass mine). There are likley others in the US, although environmental issues may be huge. But just like oil these are traded on a world wide market so more supply means lower prices. But of course there is another opportunity for Afghanistan, host a gas pipeline from Central Asia to India (politics are a bear here of course). It helps India with green house gases, and the transport charge will provide reliable revenue to the Afghans. Another thing to help them is to buy all the opium they want to grow at a decent price, and stash it away.
***But of course there is another opportunity for Afghanistan, host a gas pipeline from Central Asia to India (politics are a bear here of course). It helps India with green house gases, and the transport charge will provide reliable revenue to the Afghans.*** Lyle
Well, yes. But that depends on some sort of stability in Afghanistan. If you tried to operate a gas pipeline across that misbegotten wasteland today, it’d probably get blown up someplace or other every other Tuesday morning.
And isn’t there a minor practical issue of Pakistan controlling the entire border between Afghanistan and the Indian state of Jammu and Kashmir?
***My first though was to wonder who and why someone leaked this info just now. *** Spencer
It was more like my 15th thought, but it’s certainly a valid point. There’s been a steady dribble of bad news out of Afghanistan of late — capped by the information that our steadfast bulwark of western democracy and culture in Kabul, Hamid Karzai, is purportedly beginning to think that he might do better to cast his lot with the Taliban than NATO,
I suppose that it is possible that someone, somewhere, issued a “find some good news dammit” directive.
***The US taxpayer has been “investing” $13B per month for the past some many years to keep Afghanistan open for the taking. The setting up a Muslim version of “town hall meeting” democracy is not going so well.
A trillion is less than 7 years’ US occupation to keep the place open. UShas already lost that much on the game in Afghanistan***
I think your math is a bit off. More like $275 billion to date. See http://costofwar.com/ which is certainly not a site that seems to be friendly to the war. That said, if GWB and his minions were not total incompetents, the total cost would have been perhaps 25B — 10B to try to track down Bin Laden and 10-15B reparations to Afghanistan for goodly works. Would the Taliban still be running the place? Probably. I can’t think of a group of people (other than perhaps the American Republican Party) who more richly deserve the hopeless job of trying to run Afghanistan.
***The only worse deal for the US taxpayer is keeping the Persian Gulf open for oil delivered to our creditors Japan and China who lend the US the money to keep their oil cheap and delivered on time. ***
Particularly since the Saudis, Iraqis, and Iranians would, one suspects, quickly find a lot of common ground if the US packed up and came home. Might not be the brightest day in Israel’s history however. But, unless and until the US cuts petroleum usage by 60-70% and abandons the free market for internal oil pricing, we need cheap oil as much as China and Japan do. Petroleum prices are set by a worldwide market. Crude oil is fungible. And by following the policies of Reagan rather than Carter, we seem to have well and truly funged ourselves. Whoocoodaknown?
the devil’s advocate says
that gas pipeline would let the indians burn more gas when they oughtta be buring more solar, so it might NOT help them with greenhouse gasses.
similarly, it is not so clear the “lower prices” of commodities would be a net gain to anyone… except possibly the lowest price producer.
I can’t imagine why Karzai would think that! Oh, yeah, how many months before we withdraw? Make peace while you can, before you are removed from your head.
***that gas pipeline would let the indians burn more gas when they oughtta be buring more solar, so it might NOT help them with greenhouse gasses. ***
Gas is far more environmentally friendly than coal and significantly more so than oil. If you have to burn hydrocarbons gas is best.
I know that some folks think that solar is just a matter of hanging up a few panels and all problems are solved. Not so, no matter how much you might wish it to be otherwise. Yes someone who lives at the end of a dirt road in the wilderness and devotes the Winter to cutting wood for next winter and the Summer to trying to coax out a crop that isn’t withered by drought, drowned by rain, smashed by hail or eaten by insects can run their computer, a couple of lightbulbs and just maybe a fridge with solar. But we’re a whole lot further than you think we are from enjoying the benefits of “free” solar power.
One thing I find particularly ominious is that there is one of just about anything you can imagine solar within a few dozen miles of Barstow, CA. And every one of those mirror arrays, boilers, etc is a pilor project. And every one of them has at some point generated power. But as far as I can tell, not one of them is currently feeding power to the US power grid. If solar is so great and the installations work, why aren’t they in use? I suspect the answer is that the technology just doesn’t yet work that well.
That’s not the same path that the California wind farms (Altamont, San Gorgonio, Tehachipi passes) followed. The wind installations have been delivering power for several decades subject to the expected problems (they only work when the wind blows) and some unexpected problems (the Altamont turbines purportedly kill a lot of raptors who cruise around looking for rodents, not turbine blades)
Y’all–The link above is to a video news report of a visit to an Afghani lapis lazuli mine. Lapis is rare even in Afghanistan, the only place mineable lapis is known to exist (as far as I know). Note the working conditions of the miners. But, look at the access road to this mine. Now, imagine a large lithium operation requiring hauling in tons of equipment, supplies, and people. Then, think of the cost of constructing any mine, let alone a safe one, and so on. The whole country is like the terrain you see. I don’t think Afghani’s are likely to see any benefit from it’s minerals any time soon. They might as well be nonexistent, for all the practical value they have. IMHO. Nancy Ortiz
Grammatical and spelling errors– “Afghanis” not “Afghani’s”. “It’s” should be “their country’s.” Apologies.
still suffering from the all-or-nothing disease.
I have a neighbor who is full solar. And I will be putting in a solar pump to move some water to a more useful place. And I can’t understand why you’d need much more electricity than it takes to run a refrigerator, computer, and occasional light bulb.
Even the Indians are smarter than this. They have solar ovens. About the only thing you can’t do with solar is charge up your electric car overnight.
But I never said it would be free. The cost in imagination for example just , well, staggers the imagination.
The big problem is the motorcar. You won’t give up yours and a billion Indians and a billion and a half Chinese won’t be happy until they have one just like it.
As for the raptors, I’ll ask someone I know who studies that professionally. My understanding from her so far is that there are about as many birdstrikes on windmills as there are on tall buildings. But they do need to make an effort to keep them out of the major flyways.
It’s hard, sometimes to tell real reports from real propaganda.
once you start apologizing for spelling errors, where will it all end?
I can only hope people don’t think I’m as stupid as I look.
Oct 2001 was 104 months ago, the Afghan thingy has only cost $7B a month? It is now $13.3 and the surge is still rising.
Cheney could not get Halliburton involved for that paltry fee.
Petroleum usage would be thusly cut if the real price of importing oil were spread across the 3.7 or so billion bbl US imports.
Things like the USCENTCOM forces raised every two years and the part of US Navy maintained for the purpose of keeping oil prices down.
What is $100B a year spread over 3.7 billion bbl? That would make poil about $105/bbl in the US, today.
***Still suffering from the all-or-nothing disease. ***
You certainly are.
You seem to think that the Indians should not have access to natural gas because it offends your sensibilities. They should use solar instead. I’m merely pointing out that the solar technology you are peddling doesn’t exist and won’t for a couple of decades, if then. Solar can give them hot water. It can’t get their crops to market.
Could I personally live without a car? Sure, I have actuallly. But only in an urban environment. Can the average non-urban American live without comfortably personal tranportation? Have you lost your mind?
Perhaps you need some windshield wipers to clear your sense of vision as to what is possible now, what will be possible in a decade, in two decades and eventually.
Pictures of Afghanistan tend to remind me of the Coastal Ranges of Southern California. The Kyber pass looks a lot like the early roads through Cajon Pass and Tejon Pass before they straightened out the curves and widened them and long before the freeways. The terrain doesn’t stop people from building roads, and god help us, houses there.
Look at some pictures of the country around the great open pit copper mines in the mountain west or the Chilean desert. It’s every bit as inteimidating as Afghanistan.
The problem is that all the infrastructure work and mining isn’t likely to do much for the local population. The money goes to construction companies and equipment makers in more advanced countries and a few skilled workers who mostly won’t be Afghans. No one in this day and age is going to mine copper using picks or shovels, or even small earth movers. It’s the domain of trucks 20 feet tall and digging machines capable of lifting tons of rock in a single load. The extraction royalties could be a big help to the country of course, but I don’t think very many cents of every dollar paid will actually find its way to the country’s treasury.
***My understanding from her so far is that there are about as many birdstrikes on windmills as there are on tall buildings. But they do need to make an effort to keep them out of the major flyways. ***
That was what I thought too. There were extensive bird/bat strike studies at the first US wind installation at Grandpa Knob half a century ago, and the carnage wasn’t really all that bad. The (unexpected) raptor problem seems to be unique to the windfarm at Altamount Pass. See http://www.biologicaldiversity.org/campaigns/protecting_birds_of_prey_at_altamont_pass/pdfs/factsheet.pdf
I met a “political risk consultant” once who had made an arrangment someplace or other in southern Africa – not South Africa. Two armed groups were taking pot shots at each other right on top of a mining consession. The consultant came up with a solution. Hire everybody in sight as a guard. Paying them to stand still with a gun was, to them, way better than taking the little they could get from each other with guns. There were some niceties regarding who guarded which side of the consession and who they were responsible to corral and control, but the money available from the mining operation was enough to lubricate the situation.
The problem is Afghanistan is that much of the fight is over “traditional values” rather than wealth. Wealth certainly comes into it, but doesn’t seem the motivating factor for the majority of participants. That makes the notion of a pay-off out of the profits from extracted minerals looks iffy. Let new stuff become dominant in the economy and old stuff looses its place. That seems to be what a lot of the shooting is about now. Can’t imagine how much shooting their would be if a drag-line starts chewing up big chunks of countryside.
I’d guess that more commodities extracted from another poor, ill-governed country at the expense of huge input of fossil fuels is not a net welfare producer for the world.
Codger–Very few Afghans would end up with jobs in the mining industry. How many heavy (meaning “monster”) machine operators do you have there capable of working such digs? I don’t have any more faith than you do that the country would actually get much benefit from the vast sums of money changing hands. Well, true, there are the inevitable payoffs to local officials and police that will make their way into local communities. But, very little of that money will be spent on wells, sanitation, medical services, schools and the basic necessities needed to rebuild the country. You need arms and men to wield them in that country and probably always will. It’s impossible to imagine an Afghanistan without war. War tends to interfere with corporate profits. Halliburton wouldn’t be happy there for very long. Nancy Ortiz
It’s a hopeless effort, I have already tried to make it easy for Coberly to understand, but he too politically motivated to get it!
To solve the Pakistan problem with the gas line (all be it with some HUGE construction issues, run the line thru Tibet and then into India.
The folks to develop the Afghan resources are the Chinese they want access to resources and don’t have the short time horizons of the fully capitalist world, having patient capital available.
Robert grovels pretty well about his spelling
try to keep your sense of humor, and i will try to keep mine. i probably would “keep the indians from getting natural gas” if it was left up to me, for the reasons i gave. they don’t need it. and it would give them bad habits. at least they don’t yet have to “give up comfortable personal transportation” and they seem to get their goods to market just fine.
am i religious about this, or “too politically motivated”? maybe a bit of the former. not at all the latter. but i did think it was a point worth making.
It’s in the infographic on the NYT article. That’s also where the niobium number comes from.
I agree that copper would be easier to export. $5,000 a tonne now isn’t it? But that requires a large infrastructure to be able to produce it. Copper concentrates (what comes from the mine) are cheap and bulky, like the iron ore. Copper cathode requires huge amounts of enerrgy to produce (lots of electricity essentially).
As to the reason why they’re talking about it now: they tried to auction off an iron ore reserve lat year and no one bothered to turn up. So now they’re getting everyone excited as they try to sell it off again. That no one is interested tells you something about the costs required to get to that $1 trillion total value.
There’s also a slightly more conspiracy minded thing. Bolivia has the world’s largest lithium reserves but Morales is being a bit picky about who gets to mine it. He wants not just the mining in Bolivia but the battery making and possibly even the electric car making there. So, shouting about how there’s a big lithium deposit somewhere else puts him back in his box.