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How Afghanistan's mineral wealth is smuggled out of the country

Naqib Ahmad Atal
When it comes to Afghanistan's natural resources, all eyes are on the large deposits in Aynak and Hajigak. But for years to come, small and medium mines will be far more important for Afghan local economies. So far…
6.04.2012  |  Khost
Shadow worker: A miner extracting chromite from an unlicenced mine in Khost. (Photos: Khoshnood) 
Shadow worker: A miner extracting chromite from an unlicenced mine in Khost. (Photos: Khoshnood) 

When Pakistan launched a military campaign in its tribal areas in the northwest of the country last year, the violence also hurt an important business sector in neighbouring Afghanistan: the widespread smuggling of the area's vast mineral deposits.

Maher, a resident of the border area, says his family has invested about 1,700 US dollars in minerals, which at this point is dead capital, because prices have plummeted and he can only sell them at a loss. “If the situation in Waziristan improves, we will be able to move the stones to Karachi and if so we will reap a great profit,” he says.

Smugglers in Khost province, which borders Pakistan and holds vast amounts of the precious chromite mineral that is used to make steel harder, say the unstable situation in Pakistan is of greater concern to them than efforts by the Afghan government to curb smuggling. “If the conflict continues, it will hurt our business,” one of the smugglers says, adding that many smuggling routes have been affected, at times cutting prices by 50 per cent.

Afghanistan's soil holds an enormous wealth in untapped mineral resources such as iron, cobalt, gold, copper and industrially important metals like lithium. The central government is so far focusing on a few large scale mining projects tendered out to foreign investors. Kabul is optimistically projecting a rise in annual income from those mines to 2.4 billion dollars by 2022. Mining experts, however, say that the exploration of those large mines will take many years, and according to a World Bank study, small to medium-sized mines could create more jobs and local income in the short term.

But many of these mines have been controlled by local power holders for decades, and Kabul exercises only limited control over the revenues. Particularly in provinces close to the border, minerals are illegally mined by local communities and smuggled by criminal syndicates out of the country, depriving Afghanistan of wealth that could be used to fund much needed investments in infrastructure and health services.

According to Matthew Du Pée, an analyst with the US Department of Defense, the Afghan government estimates that about 20,000 dollars in revenues are lost every day to illegal chromite excavations in Khost. Further, the smuggling threatens stability, as criminal networks, corrupt officials and insurgents are cooperating in the business.

According to analysts' estimates, the Afghan government loses 20 thousand dollars a day in revenue from illegal chromite excavation in Khost. Much is smuggled across remote parts of the border with Pakistan, if necessary using donkeys and hill trails to avoid detection. (Photo: Allen)  

Layeq Khan, the head of the department of mining in Khost province, says that the government can do little to control its porous borders despite the presence of 300 armed security guards tasked with securing the mines. ”For the time being, there is nobody to curb the smuggling. At one point smugglers were using animals for smuggling, because the security forces were enforcing measures, but now smugglers can use any means that they wish.”

He said that he has alerted provincial officials and security officials in Kabul to the matter but that nobody has shown much interest. Afghanistan shares a long mountainous border with countries like Pakistan and Iran that is difficult to control. “There is not only one route that we could block. Khost with its long border has dozens of side roads, and controlling all these roads is an extremely difficult task for the police,” says Sardar Mohammad Zazai, the head of Khost's security department.

Mira Jan, a resident of the Tani district of Khost province, described the smuggling routes: “First these stones are transported to Miranshah (in Pakistan) and then to Karachi, and subsequently from there they are exported to China where they are used for the production of weaponry and other technical equipment.”

Mira Jan, wearing a black pakool, the region's traditional hat and spotting a long white beard, says that local communities have divided the remote, mountainous areas holding mineral deposits amongst themselves to avoid conflicts. But there has been violent fighting in the past when the government tried to gain more control over the deposits, and mining experts and local residents say the government needs to buy local communities' support with jobs and development projects if it wants to bring in formal private-sector investment to mine the deposits. 

There is huge potential for that as the local miners use outdated, unprofessional techniques which destroy much of the value of the mineral. However, local power holders have reacted with suspicion to initiatives introducing modern technology.   

Layeq says the government has plans to establish a local mining industry to mine and process mineral stones to curb smuggling by providing local demand.

"Khost with its long border has dozens of side roads, and controlling all these roads is an extremely difficult task for the police”

In Khost, Nangarhar and other provinces, the government has established a market where mineral stones can be traded. Critics say this move is legalizing the informal mining of minerals but officials and local businessmen argue that it will stop precious minerals from being smuggled out of the country. Only registered members of the local merchants association are permitted to sell precious stones in Nangarhar.

But until a more effective government capable of transparently handling private sector investment emerges in Kabul, a large chunk of Aghanistan's mineral wealth is likely to disappear across the rugged mountains of its borderlands.

Speaking on condition of anonimity, an experienced smuggler from Tani district of Khost said he believes the government stands no chance of ever fully controlling the flow of stones across mountains several thousand feet high. He said smugglers easily adapted when a company that had been awarded mining rights recently tried to set up checkpoints to curb the smuggling.

“At the beginning we transported truckloads of stones, but when the company established checkpoints, preventing us from using trucks, we turned to camels and donkeys. And when they prevented this method we turned to motorcycles, because they were not able to catch our motorcycles with their cars.”