Afghanistan Signs Major Mining Deals in Development Push

KABUL—Afghan officials have signed contracts for two major mining projects in northern Afghanistan, pushing ahead with plans to develop the country’s mineral reserves but drawing criticism over the involvement of a former minister in the project.

The deals were signed in Washington on Oct. 5 with mining and investment group Centar, and its operating company Afghan Gold and Minerals Co. to develop two sites in Badakhshan and Sar-e Pul provinces with potentially major gold and copper deposits.

The deals, reviving projects that have been stalled for years, follow a push by U.S. and Afghan authorities to develop mineral resources estimated to be worth some $1 trillion and seen as vital to building a functioning economy in Afghanistan after four decades of war.

“This investment will be transformative for Afghanistan,” Sadat Naderi, Chairman, and President of Afghanistan Gold and Minerals said in a statement.

“Once we begin mining, the country will benefit from major investments in infrastructure as well as fiscal revenue from our projects,” he said.

Poor security, rampant corruption and a lack of roads, power, and other infrastructure, have hampered development of Afghanistan’s mining sector. The few major deals which have been signed, including the vast Mes Aynak copper project signed with China’s state-run China Metallurgical Group Corp., have so far remained largely inactive.

‘Worrying Signal’

The involvement of Naderi, who served as urban development minister until June this year, has been criticized by campaigners including Integrity Watch Afghanistan, which said it was a “clear breach” of rules barring former ministers from holding concessions after leaving office.

Under Afghan law, ministers may not hold mining contracts for five years after leaving office.

Ikram Afzali, Executive Director of Integrity Watch Afghanistan and a member of the Mining Watch Afghanistan civil society group, said it would send a “very worrying signal” if some of the first major mining contracts it signed had question marks over them.

A spokesman for the ministry of mining in Kabul rejected the criticisms, saying the deal was approved in 2012, before Naderi became a minister, and had been thoroughly vetted and approved.

By James Mackenzie & Abdul Qadir Sediq