Bloomberg News

Afghanistan Seeks Investors for ‘World-Class’ Mineral Resources

September 30, 2011

Sept. 30 (Bloomberg) -- Afghanistan’s “world-class mineral resources,” including rare-earth elements, gold, iron and copper, has the potential to transform the country’s economy, the U.S. Geological Survey said.

Afghanistan’s ambassador to the U.S., Eklil Hakimi, said today the new survey data may help stimulate foreign investment and improve the country’s security.

“Afghanistan has modern hydrocarbon laws and mining laws, favorable to investors,” Hakimi said in an e-mail. “I believe that the key to peace in Afghanistan lies in our mineral resources because lasting security and stability is dependent on the amount of economic opportunity available to Afghans.”

The USGS used new and existing data to create detailed digital information packages of each mining area. The information will be distributed by the Afghan ministry of mines to companies interested in bidding for the mineral rights. The information “may make bidding and operating in these areas easier” and reduce investment risk, the report said.

“The mineral resources in Afghanistan have the potential to completely transform the nation’s economy,” Regina Dubey, acting director of a U.S. Defense Department task force that funded the study, said in a news release yesterday.

Development of those resources may help the Obama administration and allies build Afghanistan’s economy, an initiative the U.S. says is essential to stabilizing the country and the region before U.S. forces withdraw in 2014. Development of the resources is difficult and dangerous while the Taliban and its allies are seeking to gain control of territory.

Economic Future

“We all recognize that Afghanistan’s political future is linked to its economic future, and, in fact, to the future of the entire region,” Secretary of State Hillary Clinton said Sept. 22.

Clinton made her comments at a meeting with 30 of her international counterparts on a “New Silk Road” initiative during the United Nations General Assembly last week. The initiative aims to encourage investment and create new economic and transit connections within the region. The group will meet in Istanbul, Bonn and Chicago in the coming months to work out details.

Rare-earth-based magnets and materials are used in Research In Motion Ltd.’s BlackBerrys, Toyota Motor Corp.’s Prius cars, and military radar. China, a major producer of rare-earth minerals, has recently scaled back production.

For each “area of interest,” the USGS has listed the main and minor commodities as well as “possible commodities.” All the Areas of Interest were selected because they “could potentially support mineral production in the near future,” the report said.

The report offered no evaluation of the security situation in the selected areas.

--Editors: Terry Atlas, Steven Komarow

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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