US discovers massive mining riches in Afghanistan

In an ideal world this could be great news for Afghanistan. It could transform the country into a major player in the global economy, creating jobs throughout the country as well as cash to rebuild the troubled country following decades of conflict. The Soviets first started investigating during their years of occupation and since the US arrived a few years ago, various tests have suggested widespread minerals underneath the surface.

In an imperfect world, this new discovery (which somehow is making waves now as the US public is turning against the war effort) has many obstacles. We don’t need to look hard to locate environmental problems related to mining. Only today there’s a story about lead poisoning in Nigeria. Without a strong environmental protection organization, chances are high that the dash for cash will lead to grabbing minerals in the fastest way possible without considering the environmental impact. If the US can’t get BP and other oil companies to properly address the environmental risks, how can we expect mining companies to do the right thing in far away lands? Think about the Nigerian experience with Big Oil.

And then there’s the cash. Lots of cash. In a less structured economy such as Afghanistan, the risk for bribes and massive corruption are substantial. Again, look at what Wall Street, Big Pharma or Big Oil can do in what’s considered to be a structured, regulated environment such as the US or Europe. Even there, we see a thin layer at the top making enormous profits while the infamous trickle down that the GOP used to talk so much about, not really trickling down. In that context it is very difficult to see how this will work out well for more than a short list of well connected individuals and businesses.

Success is possible but is it realistic?

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 BlackBerrys.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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