Report - United States Department of Defense

UNCLASSIFIED
Afghanistan’s efforts to once again become a recognized global agricultural supplier with longterm
sustainability and a market-driven economy.
In concert with USDA and USAID efforts, the MAIL has joined forces to support continuing
transition of assets, projects, and knowledge with online reference programs affiliated with
USDA and ADT’s. The program is in the initial stages and will eventually be wholly owned and
managed by MAIL. In the interim, USDA is uploading and managing the knowledge transfer
and responding to requests from the international community to support the program. The U.S.
Embassy’s Agriculture Policy Working Group (APWG) has also begun to build a procedural
draft for the benefit of, and in conjunction with, MAIL, which will eventually be a structure for
all asset, project, and knowledge transfer, and prompt MAIL to be the lead in the transition
process.
Mining
The mining industry (both hydrocarbon and extraction) is projected to be a significant source of
potential revenue for the Afghan government. Additionally, under the World Bank’s “Natural
Resource Corridor” model, the sector could contribute to local economic growth. Under this
development model, the activity surrounding a cluster of extraction mines and/or hydrocarbon
fields would jumpstart economic activity up and down the corridors where the extraction occurs,
such as logistical support, food services, etc. Maximizing the economic potential of the sector in
this way would provide two sources of income for GIRoA: a revenue stream from the extractive
industry; and business taxes from the growing private sector.
Afghanistan has an adequate hydrocarbon law in place, however political issues surrounding a
new mining law will need to be overcome and the law passed with its key points intact if the
revenues from the minerals extraction industry are to be realized. Significant investments in
infrastructure will also be needed to facilitate local economic activity and growth. Investments in
the mining sector may be interrupted due to delayed passage of a new mining law. This law
would link exploration and extraction rights, thus providing greater incentive for companies to
invest in exploration by guaranteeing the right to extract.
The Ministry of Mines (MoM) had great success in the recent tenders of four major mineral
deposits. These deposits consisted of two gold and two copper deposits, and are located in Sair-
Pul/Balkh Provinces, Herat Province, Ghazni Province, and Badakshan Province. Bidding
opened for these tenders in August 2012, and after a selective and transparent process, the
winners were selected and announced to the international community in December 2012. The
MoM has begun contract negotiations with the winners of these deposits, but the contracts are
not expected to be signed until after the draft mining law is passed.
The Afghan hydrocarbon industry continues to mature. Currently, CNPCIW, a consortium of
China’s CNPC and the Afghan company Watan, is capable of producing oil in the Amu Darya
Basin, but missed its production requirements for 2012 because it has not reached an agreement
to sell or process the crude oil. In November 2012, the MoM announced that a consortium of
four companies consisting of Kuwait Energy, Dubai-based Dragon Oil, Turkey’s state-owned oil
company TPAO, and Afghanistan-based Ghazanfar Group submitted a bid for two blocks in the
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