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Afghan gold mining project approved


Gold may treat brain cancer

Gold may treat brain cancer

AP/Press Association Images

Gold may treat brain cancer

Afghan government officials have approved a multimillion-dollar contract to mine the wealth of gold under the mountains of northern Afghanistan.

The deal is the first mining project in Afghanistan backed by private investors in the West. Afghan and US officials hope many more deals will follow to help jump-start the economy of the impoverished nation in its 10 years of war.

"This project is an important step forward for Afghanistan's economic sovereignty," US deputy under secretary of defence Paul A Brinkley said. "It represents a turning point in the history of international investment into Afghanistan."

Mr Brinkley, who directs the defence department's Task Force for Business and Stability Operations, said the gold mine deal is evidence that Western investors are showing confidence in Afghanistan's economic future.

About 10 investors - most of them from the US and Britain - are investing an estimated 50 million dollars (£32 million) in the gold project in Dushi district of Baghlan province, about 84 miles north west of Kabul, according to Wahidullah Shahrani, Afghanistan's minister of mines. The only other gold mine in Afghanistan is in neighbouring Takhar province.

Mr Shahrani said he hoped that getting the deal approved by the Inter-Ministerial Council, which comprises the government's top finance and economic officials, would send a strong signal to global mining companies that there are investment opportunities in Afghanistan, especially in the mining sector.

Geologists have known for decades about Afghanistan's vast deposits of iron, copper, cobalt, gold and other prized minerals. In June, the US Defence Department put a startling trillion dollar (£630 billion) price tag on the reserves, but Mr Shahrani called that a conservative estimate. He said he has seen geological assessments and industry reports estimating the nation's mineral wealth at three times that figure.

For Afghanistan, the minerals are a potential windfall, although formidable obstacles remain, including lack of investment, infrastructure and adequate security in most of the nation.

Meanwhile, the Afghan government has also awarded its first private oil contract. A mining ministry official said the six-month deal for the sale of crude oil from Angot field in Sar-e-Pul province is the first awarded by President Hamid Karzai's government. Jalil Jumriany said an Afghan company won the bid on Monday to buy oil at 80 dollars a barrel.

Production from the field - which has been shut for years after militias were exploiting it illegally - is expected to hit 800 barrels a day. Revenue is expected to be about one million dollars (£630,000) a month. After six months, the field will be transferred to whoever wins the bid for a larger oil operation in Sar-e-Pul.