The New Zealand Herald, by Jonathan Owen and David Randall, Monday Mar 19, 2011
The money and blood pit that is Afghanistan – where the United States and Britain have spent more than 2100 lives and £302 billion ($580 billion) – is about to pay a dividend.
But it won’t be going to the countries which have made this considerable sacrifice. The contracts to open up Afghanistan’s mineral and fossil-fuel wealth, and to build the railways that will transport it out of the country, are being won or pursued by China, India, Iran, and Russia.
The potentially lucrative task of exploiting Afghanistan’s immense mineral wealth – estimated to be worth around £2 trillion, according to the Kabul Government – is only in the early stages. But already China and India in particular are doing deals and beginning work.
Facilities already established are being protected by local army and police, part of whose funding, and most of whose training, has been a US/British responsibility.
The anomaly of two Afghanistans – one of massacres, roadside bombs, and battles with the Taleban, the other of commercial deals in the hundreds of millions – is not lost on observers.
British Conservative MP Andrew Rosindell, a member of the foreign affairs select committee, said: “The Chinese are self-interested. I don’t blame them for that. But it is on the backs of the sacrifice made by British and Americans and others, the sacrifices we have made which we hope after 2014 will lead to a more stable and secure Afghanistan, and for the Chinese to capitalise on that doesn’t go down well.”
Dr Richard Weitz, senior fellow of the Centre for Political-Military Analysis said: “From our perspective, China should have done more in terms of security. From their perspective, they didn’t need to; they could free-ride, we were going to do it anyway. They didn’t see any point because all they would do is incur a lot of sacrifice and antagonise the Taleban and the global terrorist movement, and they’d rather let us incur that.”
But others think any involvement in Afghanistan’s development, especially by regional powers, is beneficial.
Peter Galbraith, former deputy head of the UN mission in Afghanistan, said: “Western companies are exceptionally timid when it comes to operating in places where there is even the remotest hint that it might be a little risky, and the Chinese are not and are willing to go to these places. And the Chinese have business practices that Western countries … let’s just say that Chinese generosity towards local officials exceeds that of what Western companies are capable.”
Dr Leif Rosenberger, chief economist at US Central Command, said: “I see China, on balance, playing a positive role. On the security front, nobody wanted to see a rising Chinese military power intervening in Afghanistan. On the economic front, China bought a huge chunk of US government debt, which in turn financed US military intervention in Afghanistan. China is also an inspiring, market-friendly role model for developing countries in the region.”
Afghanistan’s mineral wealth extends over a huge range of valuable resources: iron, gold, copper, niobium (used in hardening steel), uranium, marble, cobalt, mercury, caesium, molybdenum (a metal which can withstand high temperatures and is used to make various alloys), and other rare earth minerals. The country has especially valuable deposits of lithium, the metal used in batteries. Indeed, a Pentagon official is on record suggesting that Afghanistan could be “the Saudi Arabia of lithium”.
As far back as 2008, China agreed to a deal to develop the Aynak copper mine in Logar province. This is said to be the world’s second-largest deposit of high-grade copper. The Afghan National Police have deployed 1500 officers to guard the mine, while 2000 US soldiers provide general security in the province. An Indian consortium has secured the rights to two blocks in the huge Hajigak iron ore field, the other block going to a Canadian firm. India will also contribute to the establishment of an Institute of Mines in Kabul, and last October signed a strategic partnership with Afghanistan.
The deals are not confined to minerals. In late December, China’s state-owned National Petroleum Corporation (CNPC) won a contract for three oil fields in Zamarudsay, Kashkari, and Bazarkhami in the northern provinces of Sari Pul and Faryab, which will make it the first foreign company to exploit Afghanistan’s oil and natural gas reserves. The intention is that CNPC will build a refinery within three years, and this will be guarded by units of Afghan police and army.
Chinese state firms have also been involved with seven infrastructure projects, including roads in Kondoz and Jalalabad. They have also won contracts for telecommunications systems in Kandahar and Kabul. And last year, the Asian Development Bank announced it had allocated more than US$200 million for the development of the gas wells of Sheberghan, and an attendant pipeline. Italy, Turkey and Germany are also pursuing deals.
American and British involvement is low-key at present. PricewaterhouseCoopers is advising the Ministry of Mines in Kabul, and the US bank JPMorgan is active, having put together a consortium that won rights to the Qara Zaghan gold deposits.
Many point out that security, especially after US forces cease active operations in 2014, will be crucial, and could yet scupper major exploitation. But Afghanistan has just opened its first major railway and is planning half a dozen more. China, Iran, Pakistan and India all have government or corporate plans for separate rail projects across Afghanistan. Turkmenistan is completing its own plans for another line, and Uzbekistan built the first major rail link, a 75km line from the border town of Hairatan to Mazar-i-Sharif in the north of Afghanistan.
The plan is to build a series of short, cross-border tracks to Uzbekistan, Turkmenistan, Tajikistan, Pakistan and Iran. The tracks would connect to each other inside the country’s north by railways built by Iran from the west and China from the east.
“We would be able to import and export to Russia, Turkey, and even European countries,” says Noor Gul Mangal, Afghanistan’s deputy public works minister. Opening new transport gateways would also reduce Afghanistan’s dependence on neighbouring Pakistan as its only link to sea ports.