Nearly two years after Taliban fighters marched into Kabul and took over Afghanistan’s ruling capital, the militia says that it has signed seven mining contracts worth $6.5 billion. According to an Associated Press report, the Taliban claims to have signed the mining contracts with local companies with ties to Turkey, China and Iran.
Abdul Ghani Baradar, the Taliban government’s deputy prime minister for economic affairs, provided scant details about the mining deals but noted that the deals would create thousands of new job opportunities and bolster Afghanistan’s struggling economy. Afghanistan is one of the poorest countries in the world. Its economy was already in dire condition before the U.S. Army pulled out of the country and the Taliban forcibly took over administration duties.
Even though the nation is mineral rich with an estimated mineral resource value of $1 trillion in 2010, a lack of transport and export infrastructure along with limited technical expertise hampers Afghanistan’s ability to exploit its mineral resources. Geologists predict that Afghanistan has vast deposits of iron, copper, and lithium, a metal that will be instrumental in the global transition to renewable energy and electric vehicles.
The nation is also rich in reserves of precious stones such as rubies, emeralds and lapis lazuli. Afghanistan also has more than 1,400 mineral fields containing chromite, gold, copper, iron ore, sulfur, coal, zinc, talc, petroleum, natural gas and other minerals. Many of these minerals will play a critical role in the global transition to clean energy and could potentially mint the Taliban government billions of dollars.
Javed Noorani, an Afghanistan mining industry expert, says the Taliban knows converting the country’s mineral resources into cash won’t be easy. He says that mining for minerals is an incredibly complex process that calls for proper infrastructure, institutions, strategies and frameworks. In many cases, it can take more than a decade and cost hundreds of millions of dollars to take a mining project from conception to actual mining.
As such, Noorani cautioned that any details given by the Taliban government concerning the mining deals may be misleading unless those deals result in actual mining operations, which cant take years.
Much of the foreign aid going into Afghanistan stopped once the Taliban took over the country in August 2021, nearly collapsing the nation’s already struggling economy and plunging much of Afghanistan’s population into poverty. Top Taliban officials hope the new mining deals will generate billions of dollars and turn Afghanistan into a major exporter.
While the companies that have signed mining agreements with the Taliban start the lengthy process that may culminate in different minerals being extracted from the mining regions, many other companies such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are already ahead in the mine-development process as they operate in Canada, Peru and Bolivia.
NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF
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