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Pentagon: Afghanistan Could Hold $1 Trillion in Valuable Minerals

June 14, 2010 at 12:00 AM EDT
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A U.S. geologic survey has uncovered at least $1 trillion in untapped mineral deposits in Afghanistan. Margaret Warner talks to a reporter on what the valuable natural resources could mean for the Afghan economy and the ongoing war with the Taliban.
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JUDY WOODRUFF: The prospect of vast mineral wealth in Afghanistan.

Margaret Warner has that story.

MARGARET WARNER: For years, there has been much speculation and some study about huge mineral deposits in Afghanistan.

But exploration of those minerals, everything from iron and copper to the lithium used in lightweight rechargeable batteries, got lost or sidetracked by decades of war. Now, reports today’s lead New York Times story, the Pentagon is telling U.S. and Afghan leaders that the untapped mineral finds, spread throughout the country, could be worth a trillion dollars. The Karzai government said that was good news.

WAHEED OMER, Afghan presidential spokesman: It’s very heartening that Afghanistan has a very bright future, if the Afghan mineral results are properly extracted.

MARGARET WARNER: And joining us is James Risen, the New York Times correspondent who reported today’s story.

Welcome, Jim.

JAMES RISEN, The New York Times: Thanks.

MARGARET WARNER: Now, the existence of huge reserves, as we said, has been believed for quite some time in Afghanistan. What is new about what the government has developed here?

JAMES RISEN: Well, what happened was that there were — geologists had looked at this, but nobody had really been paying any attention.

And — the middle of last year, a Pentagon task force that had been working in Iraq on business development was transferred to Afghanistan. They began to look for, what is it we can do here economically? And they stumbled across these geological reports that nobody had been — in the upper reaches of the U.S. government began looking at. And they began to realize this is the answer that we have been looking at for something other than drug dealing in Afghanistan.

MARGARET WARNER: Now, the U.S. originally or at least most recently got engaged with this, what, back in ’04?

JAMES RISEN: Yes. What happened was the — early in the war, the Bush administration was looking for some reconstruction projects.

And, as part of that, the U.S. Geological Survey was asked to go and just do a series of different assessments. One of them was a mineral assessment. And one of the top geologists at U.S. Geological Survey went to the Afghan geological survey’s library. And they — he stumbled across what some of the Afghan had preserved, old Soviet charts from the Soviet era.

The Soviets had looked at this and wanted to exploit it. But then the war got in the way, and they never did. And these charts were sitting. And, in fact, some of the Afghan geologists took them home during the civil war to preserve them. Those charts were then used by the Americans to do new surveys.

And, by 2007, they had completed some new high-tech charts and datas that showed enormous deposits that nobody knew existed. But then nobody in the U.S. government looked at them, anybody — you know, no policy-makers, until last year. And they began to realize, wait a second, this is — this is huge.

MARGARET WARNER: Now, there have been blogs. Your story has unleashed blogs and columnists today questioning the timing on the part of the Pentagon.

JAMES RISEN: Uh-huh.

MARGARET WARNER: Like, why are they willing to talk about this now?

JAMES RISEN: Right.

MARGARET WARNER: And does it have anything to do with the spate of really bad news from the Afghan war front?

JAMES RISEN: Oh, sure, probably. You know, there’s always a reason why somebody wants to talk about good news. So — but I think that doesn’t mean that it’s not an important story.

MARGARET WARNER: And how are they able to actually put dollar figures on this?

JAMES RISEN: Well, the Pentagon — that was the thing. The Pentagon people brought in some economic experts to look at this. The — the geologists had really never tried to do an evaluation on this.

That’s what the Pentagon team has done. They have got people from a lot of mineral companies that are starting to look at this now and go over to Afghanistan and — and judge this. And, so, the Pentagon’s begun to do that.

That — that’s the business…

MARGARET WARNER: Business side.

JAMES RISEN: … development side that came in last year to work with the geology side.

MARGARET WARNER: Now, it goes without saying that, if these were properly developed, it would transform the Afghan economy.

JAMES RISEN: Right. Right.

MARGARET WARNER: Right. I mean, give us a sense of the scale.

JAMES RISEN: Yes, I mean, it’s — the Afghan gross national product, I think, is $12 billion a year. And this is about a trillion dollars in deposits. It could take decades or, you know, generations to fully develop, but I think, for the first time, it provides some alternatives for the Afghans.

MARGARET WARNER: But it is big — I mean, if you look at the example of Bolivia, which has this lithium, the…

JAMES RISEN: Right.

MARGARET WARNER: … substance used in batteries, they have had a — they have had an impossible time developing what they have got, right?

JAMES RISEN: Right. Right.

MARGARET WARNER: Because they don’t have the infrastructure of any kind.

JAMES RISEN: Right.

That’s one of the problems here, is that Afghanistan doesn’t have much of a rail network. It has no real mining culture. And it’s in, as you — it’s in the middle of a war.

One of the things that is — the first thing that’s going on is the Aynak copper mine. The Chinese have already gotten a deal with Afghanistan…

MARGARET WARNER: That was last year, right?

JAMES RISEN: And that’s the first big mine that’s going to go in.

And what the — what the Chinese have agreed to do is to build rail networks to go with that. But the railroads are all going to go back to China. And, so, the question is, where — what kind of infrastructure…

MARGARET WARNER: You mean the lines will actually go from Afghanistan to China?

JAMES RISEN: Yes. They’re going to go — so, what is the — what kind of infrastructure are you going to get? Is it going to be something that is heavily weighted towards Chinese extraction of Afghan minerals, or are you going to have something that is more for Western development?

And it will be interesting. And it’s going to take a long time really to develop this.

MARGARET WARNER: Then, also, would — would you agree that, in the country with the level of corruption that Afghanistan has…

JAMES RISEN: Mm-hmm. Right.

MARGARET WARNER: …both official and business wise, that this could be a two-edged sword?

JAMES RISEN: Oh, yes. I mean, I think that’s one of the things that — the real problem here is, can you develop — I mean, you have already got a country that’s heavily corrupt. And, so, the question is, can you develop this in a way that will provide stability, or is it going to just turn it into another Congo or Nigeria, where you have got natural resource industries that just weigh down the country in — in — deeply in corruption?

MARGARET WARNER: And just make the elites more elite.

JAMES RISEN: Right.

MARGARET WARNER: And what is the Pentagon doing? Your story suggested that the Pentagon is actually trying to help them get ready to put out other projects to bid as early as this fall?

JAMES RISEN: Right. Yes. They have brought in some international accounting firms to study how to start the bidding process.

So, one of the things they’re going to do is work with — have these accounting firms work with the Afghan ministry of mines to try and figure out, what is the best kind of contract to have that would — what is the international norms for contracting for these kinds of deposits?

MARGARET WARNER: And we should probably say that, by some accounts, that’s one of the more corrupt agencies in the Afghan government.

JAMES RISEN: Yes. That was the — the last — on the Chinese mine in Aynak, they had major bribes.

MARGARET WARNER: Well, thank you, Jim. Jim Risen of The New York Times, thanks so much.

JAMES RISEN: Sure.