Digging Afghanistan

The Defense Department caused a stir this week when it released a report revealing that Afghanistan has more than $900 billion worth of untapped mineral deposits, including iron, copper, gold and lithium. The working theory is that mining could be the economic salvation for the war-ravaged country that’s almost entirely dependent on foreign aid and opium production.

Normally, it would be a stretch for a columnist in Nevada to address matters in a distant place such as Afghanistan. But Nevada is one of the world’s leading mining centers, and some of the industry’s foremost experts are here. While reporters in the nation’s capital consult the usual suspects at beltway think tanks and lobbying groups, I thought it might be interesting to find out what some Nevada-based authorities have to say.

I started with Greg Arehart, chairman of the Geological Sciences and Engineering Department at the University of Nevada, Reno. Noting that people have known about Afghanistan’s mineral riches for some time, I asked why they haven’t been exploited. Basically, he said, “nobody likes to get shot at.”

In other words, political stability is a crucial factor in a mining company’s decision to invest in a particular place, and Afghanistan is not what anyone would call stable. “Most Western companies look at Afghanistan and say the risk is too great,” Arehart said. “There are other places to make money.”

Getting shot at, however, is not the prime concern. If a mining company is going to invest a billion dollars in a project, it needs confidence that the rules won’t change in the middle of the game.

“You’re looking at a development that is taking many decades typically,” said Jon Price, director of the Nevada Bureau of Mines and Geology. “Thirty to 50 years is not uncommon.”

Bolivia, Price noted, has seen Western mining companies pull back lately because of political uncertainties. “The Bolivian government is sending out signals about nationalizing its mineral resources,” he said.

In the early 1970s, under socialist President Salvador Allende, Chile’s copper mines were nationalized, resulting in big losses for foreign mining outfits. But even short of nationalization, politics and war are big concerns. In Afghanistan, it isn’t difficult to envision Taliban leaders and tribal chieftains imposing “local taxes” in order for mining to proceed smoothly.

Aside from political conditions, developing a major mining operation takes a long time, as rural Nevada communities know all too well. “In 95 percent of cases, it’s a five-year plan no matter what,” Arehart said. “It depends on what the local infrastructure is. It’s getting materials in and out. It’s getting people in and out.”

The primitive development and rugged landscape of Afghanistan aren’t particularly daunting for a large mining company, though. After all, miners have a long history of extracting ore under difficult conditions.

“If the resource is valuable enough, the infrastructure issues are not insurmountable,” Price said.

Hiring local workers is another challenge in Third World countries, because extensive training is required. In 1989, Price visited a copper mine high in the mountains of New Guinea. Locals were hired to drive the huge trucks that transported the ore down the mountain. “Prior to learning how to drive those trucks, the most complicated piece of machinery they had used was a bow and arrow,” he said. “They were people who live in the jungle and were not very technically sophisticated. The company was training these people to be truck drivers. It took them a few months to bring them up to speed.”

The most likely investors in Afghanistan, many believe, are the Chinese. People often talk about the big Western mining companies as if they are monolithic entities that control the industry, but the Chinese are the world’s biggest mineral producers.

“China is dominant in terms of mineral production,” Price said. “They produce about 40 percent of all the iron produced in the world. They produced half of all the steel in the world last year.”

If a mining industry emerges in Afghanistan, it’s not likely to have much of an impact on Nevada — except for tapping into our state’s vast mining knowledge.

“We have expertise here that is very much in demand,” Price said. “As Afghanistan opens up more, my guess is we’ll see more of our technical experts in geology and mining and metallurgy and environmental protection involved there.”

Critics have suggested the release of the Pentagon report was timed to counteract a wave of bad news out of Afghanistan. The war is not going well, and the clock is ticking on President Obama’s vow to bring home most of the U.S. troops next year.

But the potential of Afghanistan’s mining resources should not be dismissed as just a political ploy. Consider that Nevada looked more than a little bit like Afghanistan until gold and silver deposits were discovered here. Nevada attracted people, developed an economy and gained statehood thanks to mining in the nation’s most forbidding desert.

As Nevada learned, a sustainable economy can’t be based on mining alone. But it’s not a bad place to start.

Geoff Schumacher (gschumacher@reviewjournal.com) is the Review-Journal’s director of community publications. His column appears Friday.