Golden opportunity

Canada is primed to play a major role in developing Afghan resources

[e-mail this page to a friend]

The Gazette, Sunday, June 20, 2010

There's gold in them thar hills. And copper. And iron, cobalt, and industrial quantities of lithium. So much of so many minerals, the New York Times reported the other day, "that Afghanistan could eventually be transformed into one of the most important mining centres in the world."

Afghanistan? Yes, Afghanistan, the broken country, landlocked and miserable, the fourth poorest country on Earth, whose largest cash crop, accounting for two-thirds of its $12-billion annual output, is illegal. Afghan poppies supply much of the world's heroin trade.

The U.S. geological survey and the Pentagon initially estimated the value of Afghan mineral deposits at $1 trillion. At a briefing in Kabul, excited Afghan journalists crunched the numbers and reported that translated into $35,000 for every man, woman and child in the country. It turns out the $1 trillion is a very conservative number and the real value of Afghanistan's mineral wealth might be as much as $3 trillion, or $100,000 for every Afghan.

Well, not tomorrow, and not in 10 years time, but perhaps over a generation. A landlocked country the size of Manitoba or Texas, with nothing but rocks to fight over, turns out to be a treasure house of minerals. The initial conservative estimate is that Afghanistan has $420 billion of iron deposits, $275 billion of copper, $50 billion of cobalt, and $25 billion of gold. If the $3 trillion estimate proves out, there could be more than $1.2 trillion of iron alone, more than the size of the initial estimate and nearly equivalent to the GDP of Canada, one of the richest countries in the world. And our wealth derives precisely from our abundance of natural resources -including the very minerals discovered in Afghanistan.

Afghanistan is rich. Who knew? Well, it seems the Soviets had some inkling during their occupation of Afghanistan during the 1980s, and U.S. geologists stumbled across some of their charts and data, but have only recently put all the pieces of the mineral deposits together. As the Times reported in its initial article: "The story of the discovery of Afghanistan's mineral wealth is one of missed opportunities and the distractions of war."

And in that war, the discovery of Afghanistan's wealth is potentially a huge game changer, as well as one with profound implications for the geopolitics of the region. Not only does Afghanistan have geography as old as the Silk Road, it also has stuff to sell, stuff that runs economies. If you thought the regional warlords and the Taliban had a hold on the country when it was poor, don't expect them to become pushovers when it's potentially rich. Don't expect the Chinese and Pakistanis to be disinterested bystanders, either.

For the United States, Canada and the NATO forces that have been fighting a challenging counter-insurgency against the Taliban, this raises the military stakes exponentially. It could well prolong their presence in the country past their present timelines for withdrawal, if only to provide security perimeters around mines that would be built by Western engineers.

While the U.S. has tripled its contingent to 100,000 troops under Barack Obama, he has also ordered withdrawals to begin next July.

As for Canada's commitment of 2,500 troops in Kandahar, they are also scheduled to leave next July. Stephen Harper seems impervious to any suggestion of prolonging the mission. He is obviously concerned about mission creep, not without reason.

But Michael Ignatieff gave Harper significant manoeuvring room the other day with a major foreign policy address in Toronto, in which the Liberal leader laid out a rationale for prolonging Canada's presence in Afghanistan. He suggested staying for a fixed term to help train police and soldiers, as well as to help build Afghan governance in education and the justice system.

A more compelling reason for Canada to stay on is to help the Afghans build a mining industry. They might have a ministry of mines in Kabul, but they don't have a mining industry, and they have neither the know-how nor the money to build one.

This is precisely where Canada can play a leading role. No country in the world has a mining industry as advanced as our own, precisely in all the segments where Afghanistan turns out to be richly endowed. Canadian mining companies have impressive projects all over the world.

It is not by accident, for example, that Barrick Gold has the world's largest gold mine in Nevada, and one of the largest copper mines in Chile. It has also set up recently in Pakistan, where there is an abundance of resources. SNC-Lavalin also has global expertise in mining (and has built a major hydro project in Afghanistan).

But as Afghan mines are built and exploited, security will have to be provided for engineers and miners. If the Taliban have no scruples about blowing up schools, they will equally have no hesitation to blow up mines. This is the best reason for Canada to stay on in the country -helping the Afghans build prosperity.

For Canada, it's quite literally a golden opportunity.

  © Copyright 2006-2012 L. Ian MacDonald. All Rights Reserved. Site managed by Jeremy Leonard