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Minerals offer Major Investment Opportunities in Afghanistan

Afghanistan’s mining industry offers a wealth of possibilities for the prospective investor, yet this lucrative sector is often overlooked by the global investment community. Although recent studies by the United States Geological Survey have determined that Afghanistan’s resource base is significantly greater than previously understood, the country’s mining sector remain virtually untouched.

Afghanistan boasts a long tectonic history and one of the most complex geologies in the world. Historically, mining in Afghanistan has focused on the production of precious stones. Afghanistan’s most famous stone, Lapis Lazuli, bejeweled the clothing and ornaments of Egyptian Pharaohs. More recent explorations has resulted in the discovery of significant resources of copper, iron, gold, halite, talc, and mica and marble.

The Potential for Gold

Afghanistan has the potential to become a great producer of gold, yet the country’s deposits are currently under-explored. For centuries gold has been worked from Takhar province in the North to Ghazni, Zabul, and Kandahar provinces in the south-west. The most substantial contemporary source of gold is located in Takhar province. There are 112 gold occurrences recorded so far, and the main classifications by deposit styles include skarn, vein, porphyry copper-gold, epithermal, and placer. Modern analytical exploration techniques have the potential to greatly expand the known register of gold deposits throughout the country.

 

The Potential for Copper

According to a recent survey by the British Geological Survey (BGS), there are around 300 documented copper deposits, occurrences and showings in Afghanistan.  A number of old excavations and pits, as well as remains of smelting furnaces, have been discovered at the world renowned Aynak Deposit and also nearby at Darband and Jawkhar.  This potential for the discovery of copper or copper-gold porphyry deposits in association with younger plutonic rocks of the Tethyan Magmatick Arc, includes the Sar Chesmeh deposit (>1.2 billion tones @ 0.8% Cu and 0.3g/t Au) in Iran and the Saindak deposit in Pakistan.

Rare-metal Deposits

Rare-metals like lithium, cesium, tantalum and niobium are found in three main deposit types, pegmatites, mineralized springs and playa-lake sediments. While there is a considerable potential for exploiting all three types, the mineralized springs and playa-lake are the most easily extractable resources. However, pegmatite fields, mostly in the eastern region of the country, extend up to 400 km.

Gemstones of Afghanistan

Afghanistan has rich deposits of precious (emeralds, ruby, and sapphires) and semi-precious (lapis lazuli, tourmaline, aquamarine, kunzite, topaz, garnets, fluorite, and varieties of quartz) gemstones. The precious gemstones are mined in Afghanistan while the semi-precious gemstones are worked. People living in villages surrounding the mines typically extract gemstone manually, using hand drills, dynamites and explosives, which creates a large amount of waste. Moreover, the current pattern of trade—gemstones mined in Afghanistan leaving the country illicitly and sorted for quality in Pakistan—causes a major decline in value gained by Afghanistan. A World Bank report (Mining as a source of growth, March 2004) shows a value of US$2.75 million, while according to a UNDP (2005) report, the potential annual value can be up to US$160 million annually.

Iron Deposits of Afghanistan

A recent British Geological Survey (BGS) found iron ore deposit, copper deposit, and marbles, situated in the mountainous Aynak as well as Kabul and Bamyan provinces of Afghanistan. “The presence of coking coal nearby at Shabashak and the world-class ranking of the iron ore resources combine to make the deposit an exceptionally favorable target for economic development in Afghanistan.”  According to the same study, the Hajigak deposit contains an estimated resource of 1.8 billion tones of iron.

 

Marble of Afghanistan

Afghanistan has over 20 marble producing factories throughout the country, but lacking adequate equipment to process the stone, indigenous marble is among the country’s most expensive. Typically rough hewn blocks are exported to neighboring countries for processing and imported back to Afghanistan with lower prices and higher quality. Although the current extraction method results in up to 50% of wastage at the quarrying stage, it has been stated by the BGS that “the Chesht and Khogiani marbles…have been favorably compared to Carrara marble, an Italian marble recognized to be one of the finest in the world.”

Conclusion

Several decades of war and insecurity in the country prevented adequate foreign investment in key sectors of Afghanistan’s economy. Today, Afghanistan offers a wealth of investment opportunities and has begun to attract the attention of investors from as far away as the United States, Europe, China and Australia.  

The government of Afghanistan and in particular, the Ministry of Mines & Industries is now closely working with international partners including the World Bank, the United States, and the British Geological Surveys to promote investment in various mining-oriented industries. The establishment of the Afghanistan Investment Support Agency (AISA) and the Export Promotion Agency of Afghanistan (EPAA) are great examples of the government’s interest in promoting foreign investment in Afghanistan, while strategically focusing on how to market our famed products globally.

 

For more information or to search for tender opportunities in mining, oil & gas, or other major investment projects in Afghanistan please see www.bgs.ac.uk/afghanminerals , http://energy.usgs.gov/ or contact commerce@embassyofafghanistan.org

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