Afghan President Sets out His Mining Agenda
Dec 4, 2014
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Extractive Industries Transparency Initiative
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The potential for major government revenue from the Afghan mining sector is significant. Whilst it will not alone revive Afghanistan’s economic prospects, it will need to be part of the solution. According to some royalty revenue to the government from mineral production is expected to be around US $1.2 billion per year within the next five years, and increase to US $3.5 billion per year after 15 years. Ghani himself says that Afghanistan will be the biggest producer of copper and iron in the world within 20 years. Yet, as the EITI reports reveal, government revenues from the sector have only been between US $10 million and US $100 million per year for the past few years. President Ghani set out his three aims from the sector:
- Avoid doing harm. In order not to squander the wealth as so many other resource-rich countries had done, he was keen that the focus be on cautious growth of the sector: firstly, ensuring that the licences are allocated fairly and openly; secondly, focusing on building the institutions and human capacity; thirdly, working with the 34 provinces to work out their rights and status in relation to the mines. “Mining can come later” he said.
- Build the infrastructure and invest, so that the revenue creates jobs beyond the sector and builds a lasting legacy.
- Collect basic information, as through the EITI, so that better assessments can be made of the potential and risks of the minerals and spending can be directed where it is most needed.