Afghanistan and Its Mineral Wealth

While I always thought that our war in Afghanistan made no sense, I was dismayed and saddened by the lack of leadership and planning exhibited by my government in Kabul. Any decision by a committee lacking responsible leadership is bound to fail and results in finger-pointing.

There is one video clip which is engraved in my mind. It shows, that on August 15, when Kabul was falling, our president sitting all alone at Camp David on one side of a long conference table, just keep looking at a number of TV screens on the opposite side of the room.

Among all this handwringing about the fate of the Afghan women and translators, one should not forget the economic side of this war. Here, the most important U.S. economic interest is the TAPI gas pipeline which is majority owned by U.S. oil companies and was to transport 3.2 billion cubic feet per day of natural gas from fields in Turkmenistan via Afghanistan to Pakistan and India.

Passing through Afghanistan requires the acquiescence of the new Taliban government. The original Taliban government in 1998 gave such permission, But it was later reneged.

This was said to have been a major reason for our invasion of Afghanistan. Partly due to the war and changes of governments, the TAPI pipeline never got finished. The latest target of completion is late 2022.

Nevertheless, having hundreds of billions dollars invested, it would behoove our State Department to renegotiate with the new Taliban leaders to renew the permit of passage.

Bloomberg News Channel asked: What happens to the great mineral wealth in Afghanistan, estimated to be worth $1 trillion, including iron, copper, gold, coal, uranium and lithium. A valid question.

Here is what I know so far:

In 2011, the then-democratic Afghan government awarded 80% ownership for the Hadjigak iron ore mine, holding about 1.8 billion tons of iron ore to an Indian consortium. A Canadian firm owns the remaining 20%.

In addition, in 2011, the Chinese government, after paying $3 billion, purchased the concessions for what is believed to be the largest copper reserve in the world at Mes Aynak.

Finally, there is a memorandum of understanding with an Australian mining company looking for gold, which is currently produced at a yearly rate of $500 million worth. After spending a trillion dollars for a 20-year war, I still question: where is our share?

The question is, will the new Taliban government honor those agreements? They certainly will alter the terms of those agreements.

PS: My inflation forecast from July still stands.