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Old Sunday, December 05, 2010
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Default Sunday, 5th Dec, 2010

Don’t forget the good news

Afghanistan’s huge mineral resources remain to be tapped; when and how are the questions

By Haider Abbas

The discovery of untapped lithium deposits in Afghanistan by the United States is far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself.

Lithium has multiple uses in the modern world, including as a mood stabilizing drug, but its first serious industrial use was during the Second World War as part of high temperature greases that were perfect for use in aircraft engines.

The US was the world leader in lithium production from this era until the 1980s when vast South American deposits began to dominate. It is said that Afghanistan could be the "Saudi Arabia of lithium," a key raw material in the manufacture of batteries for laptops and mobile phones.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

With the potential being great and the possibilities of making an enormous profit, certain realities make us ponder whether lithium could be the miracle that would turn around the situation in this war-torn Afghanistan.

The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion, whereas these vast deposits could become the backbone of the Afghan economy.

However, while looking at all these possible prospects certain questions come into our mind. Firstly, instead of bringing peace, the newfound mineral wealth could lead the Taliban to battle even more fiercely to regain control of the country. The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources.

Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced. Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral rich districts.

While these are internal problems we have the external threats. Another question is the role of the White House. Taking a trip down memory lane when we look at Iraq and how the war on terrorism was a disguise to smuggle oil. We have our doubts whether the lithium may actually be used to reform Afghanistan and not the United States. At the same time, American officials fear resource hungry China will try to denominate the development of Afghanistan’s mineral wealth, which could upset the United States, given its heavy investment in the region.

With all this, another complication in the technical aspect is that because Afghanistan has never had much heavy industry before, it has little or no history of environmental protection either. The big question is, can this be developed in a responsible way, in a way that is environmentally and socially responsible? With virtually no mining industry or infrastructure in place today, it will take decades for Afghanistan to exploit its mineral wealth fully.

Still, good news is hard to find in Afghanistan these days. Will the attempt to remain positive despite the "ifs" that surround this news succeed? Is there really a choice?
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