Taliban Controls Afghanistan’s Mining Profits

October 21st, 2015 by

terroristRemember the Taliban?

I know, in the past 15 years, we’ve shifted our anti-terrorism efforts (and thus our attention) to other radical groups like Al-Qaeda and the so-called Islamic State, but the Taliban is still an active political force in Afghanistan and Pakistan. To date, they’ve now been at war with the U.S. for 14 years.

In addition to continuing to score victories on the battlefield, the Taliban is also taking a huge bite out of Afghanistan’s lucrative mining industry, which is valued somewhere between $1 trillion and $3 trillion in total.

According to estimates reported by Bloomberg, the Taliban and other local smugglers affiliated with the group are grossing about $120 million annually off of Afghanistan’s mineral resources, four times as much as the Afghani government is bringing in from mining. The country is particularly rich in rare-earth metals, lead, copper, gold, lithium, and precious gemstones.

In the largely lawless, war-torn Afghanistan, a country smack in the heart of the Middle East, the Taliban mostly operates in the southeast part of Afghanistan. It also has a strong foothold in the northwest part of neighboring Pakistan. Behind the illegal sale of narcotics, looting mining operations represents the second-largest income stream for the Taliban.

The green regions of the map indicate areas of Taliban insurgency.

The green regions of the map indicate areas of Taliban insurgency.

Long-term Problem

Afghanistan’s fledgling government currently receives more international financial aid than any other country in the world. Just a few years ago, the country’s previous Mines and Petroleum Minister optimistically saw the government reaping $1.5 billion annually from its mining sector by now—not $30 million.

The minister has since been replaced.

Nonetheless, it may be true that developing and securing its mineral mining is Afghanistan’s best ticket toward self-sufficiency and regaining some semblance of control over its people and its economy. Economic transformation, like most things, is easier said than done.

mining2It doesn’t help that the country’s biggest mining projects have run into logistical issues.

“Mining projects including Mes Aynak and Hajigak are now turning into a nightmare,” said the head of the country’s parliamentary Natural Resources Commission, Mohammad Zakaria Sawda.

In terms of reliance upon foreign aid, Sawda remarked, “Afghanistan will continue to shamefully remain the world’s biggest beggar.”

In addition to the ongoing financial assistance that a U.S.-led coalition is providing to the government in Afghanistan, President Obama has also committed to keep almost 6,000 American troops in the country indefinitely through the end of 2016.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.