Saturday, October 13, 2012

The mother lode?

Every so often we see breathless articles in the news informing us that Afghanistan is sitting on a mother lode of minerals... For example, the recent article 'China Eyes Afghan Goldmine' discusses recent Chinese investments in Afghanistan. It also appears to imply that China is sneakily getting the inside track (those wily orientals!) to the $1 Trillion mother lode!

On the face of it one trillion dollars of mineral reserves sure sounds very impressive, but is it? The June 28th blog entry, 'Random charts', sourced the $1 Trillion figure to 'DoD Afghan Economic Sovereignty, Mineral Wealth Briefing' which provided estimates developed by the Task Force for Business and Stability Operations, which concluded:  

"$908B: Current potential value* of metal and industrial mineral development in Afghanistan, at current prices in today’s global economic downturn. (* Known and estimated “undiscovered” resources anticipated by USGS and AGS and using prices as of 12/09)" and provided the chart below.

So, two thirds iron ore and copper. OK, decent mineral deposits that certainly could help the country (should it ever be safe to mine them, that is), but they would not seem to justify the 'breathless' headlines generated e.g. U.S. Identifies Vast Mineral Riches in Afghanistan ("Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe") or Afghanistan Holds Enormous Bounty of Rare Earths, Minerals ("Afghanistan's underground wealth could transform it from one of the world's poorest nations into a prosperous major global mining center"), etc.