Wednesday, June 30, 2010

Mining in Afghanistan

This was a news item a few weeks ago, but I haven't heard any updates since. Basically a team of US geologists, aided by Pentagon officials and guided by Soviet maps guarded for decades by Afghan geologists, have identified extensive mineral deposits in Afghanistan. The minerals include traditional things like iron and copper, but what seems the most exciting to people is the lithium deposits. Lithium is used in batteries for electronic devices, and there exist only a few major deposits in the world (much of the world's lithium is in Bolivia, which does not seem to be an eager participant in foreign-led mining ventures).

Aside from the obvious and justified suspicions that arise when an occupying military power states a desire to develop mining operations to help the occupied country, this story brings up a lot of topics I've been thinking about in the Colombian context. Despite the predictions of a new era of national prosperity that always seem to accompany major mineral finds, mining rarely leads to real development and improvement in well-being for most people. We in Colombia are expanding our mining sector, and it looks good for our macroeconomic numbers, but the sector creates little employment, lots of environmental damage, and lots of concentration of wealth (which in Colombia often goes hand-in-hand with the strengthening of death squads that terrorize the common folk). In countries like Nigeria these trends are even more extreme and ugly.

A rare exception to this trend is Chile, where for a long time foreign-owned copper and nitrate mines did likewise cause more misery than prosperity for the people. But over the course of the 20th century Chile claimed and maintained most of the control over its mines, such that today I would say that Chile's mines actually benefit Chileans. The Chilean case though is that striking exception among countries with mining-based economies. I can't imagine how a poor, corrupt society like Afghanistan could really turn the exploitation of its mineral wealth by foreign companies to the country's own advantage.

2 comments:

  1. I think that the question remains... what are going to be the environmental costs of this new discovery? Water degradation is going to increase from mining activities, thus affecting crop outputs, human health, and overall environmental health, not to mention increasing the national security strains that are already well established!

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  2. MWaters--

    Thanks for reading and for commenting. You're right on that mining causes serious environmental damage, but for me what's even worse is that it's not even an arguably justifiable trade-off between general wellbeing and environmental health. Because the benefits of mining go to the few big companies that can afford the heavy capital investments necessary, basically the population neighboring any future mine in Afghanistan would suffer a lot of environmental problems with little improvement in their economic situation. As I pointed out in the article, if a country puts in place good policies to redistribute mining's economic benefits (royalties charged to mining companies, heavy taxation of mining profits, etc.), then mining can be a net benefit to the society, as in Chile (and to a lesser extent Colombia). In such a case even environmental damage could be controlled and part of the mining profits could be dedicated to environmental recuperation. But I don't think the Afghan state is strong or coherent enough to put in place such progressive policies, and outside countries like the US or China can't be counted on to enact measures to benefit the average Afghani.

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