Monday, June 14, 2010

Afghanistan is rich!

. Monday, June 14, 2010

The NYTimes is reporting that American geologists have found massive untapped mineral deposits, estimated at upwards of $1 trillion, throughout Afghanistan.

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.
Last year, I highlighted that over half of the world's current lithium reserves are located in Bolivia, a country whose current political leadership isn't particularly high on our list of best friends. The Times is reporting that the geologists initial analysis of one location in Afghanistan's Ghazni province showed the potential for lithium deposits of about the same size as those in Bolivia, which can potentially be a game-changer in and of itself for the Afghan government and the US-led war in Afghanistan. As I noted last year, lithium powers virtually every single battery that we use in our daily lives, from our cell phones and laptops to our iPods and even new battery-powered electric cars.

Two things got me thinking after reading the article: 1) It seems as if the deposits were first discovered by Soviet engineers and geologists after the Soviet invasion of Afghanistan. After the Soviets withdrew from the country, the maps remained behind hidden by Afghan engineers. I find it hard to believe that the Taliban and ensuing Afghan governments had no idea that Soviet engineers had found vast deposits of minerals. But maybe they didn't. If they did, why would they not seek to exploit them?

The second thing is: how will this mineral discovery affect the Afghan government and the future of the Afghan political and economic system? My guess is that there will be heavy competition for mining rights amongst American, Chinese, India, Russian, Brazilian and British firms. (Duh.) But corruption, money laundering, environmental problems, and labor exploitation will absolutely rise. Afghan government corruption is already incredibly rampant and the discovery of vast reserves of minerals will explode that corruption to levels we've never seen. I guess it's a great time to get a job in the Afghan Minerals Service and other government agencies related to Mining and Commerce. This will also almost surely mean that the United States won't be leaving Afghanistan for the next 100 years. We've invested far too much to leave right when a massive pile of dollars emerges from the ground. We have the capital, the infrastructure and the machinery to be able to extract and exploit these resources. Our presence on the ground in Afghanistan should give us a first mover advantage over other governments.

One last thing, there is going to be no way in hell that Hamid Karzai is going to want to leave his post as president of Afghanistan. He rigged the election last year to stay in charge of a super-poor, agrarian, completely destroyed country that is fighting an insurgency. Now that he can potentially control loads and loads of global mineral reserves, huge commercial interest from the world's most important nation-states and reap massive personal financial benefits from his position, only another civil war will be likely to remove him from power. Oh yeah, the probability of a civil war over the next decade just increased to about 99.9%.


Josh.Miller said...

at the very least, this will change the way a lot of us teach Machiavelli next year!

Afghanistan is rich!
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