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Afghanistan"s copper deposits may hold key to future

Afghanistan"s copper deposits may hold key to future
China"s $3 billion project to gain access will provide needed jobs, royalties

JALREZ VALLEY, AFGHANISTAN: In this Taliban stronghold in the mountains south of Kabul, the U.S. Army is providing the security that will enable China to exploit one of the world"s largest unexploited deposits of copper, earn tens of billions of dollars and feed its voracious appetite for raw materials.

U.S. troops set up bases last month along a dirt track that a Chinese firm is paving as part of a $3 billion project to gain access to the Aynak copper reserves. Some troops made camp outside a compound built for the Chinese road crews, who are about to return from winter break. American forces also have expanded their presence in neighboring Logar province, where the Aynak deposit is.

The U.S. deployment wasn"t intended to protect the Chinese investment — the largest in Afghanistan"s history — but to strangle Taliban infiltration into the capital of Kabul. But if the mission provides the security that a project to revive Afghanistan"s economy needs, the synergy will be welcome.

""When you have men who don"t have jobs, you can"t bring peace,"" said Abdel Rahman Ashraf, a German-trained geology professor who"s Afghan President Hamid Karzai"s chief mining and energy adviser. ""When we take money and invest it in a project like Aynak, we give jobs to the people.""

Thousands of jobs

Indeed, the project could inject hundreds of millions of dollars in royalties and taxes into Afghanistan"s meager coffers and create thousands of desperately needed jobs.

Beijing faces enormous challenges in completing the project and gaining access to the estimated 240 million tons of copper ore that are accessible through surface mining.

Taliban-led insurgents operate in large parts of Logar and Wardak; the area is sown with mines; and China must complete an ambitious set of infrastructure projects, including Afghanistan"s first national railway, as part of the deal.

China"s willingness to gamble so much in one of the world"s poorest and riskiest nations testifies to its determination to acquire the commodities it needs to maintain its economic growth and social stability.

In Mount Toromocho in the Peruvian Andes, for example, the only copper deposit said to be larger than Aynak, China is relocating a town and its inhabitants to get at a mountain of copper ore.

""Why the Chinese? Because they have money, they have lots of money,"" Ashraf said. ""One day, when there is no more copper elsewhere in the world, the Chinese will have copper.""

""If they (Chinese leaders) don"t feed their immense industrial complex, their populace could become disruptive,"" said a Western official, who asked not to be further identified so he could speak freely. ""We expect to see more such competitions"" over Afghanistan"s untapped reserves of natural resources.

Less from China

Although China is contributing a much smaller share of the more than $15 billion in international assistance that"s been pledged to Afghanistan since 2001 than the United States is, the Obama administration isn"t complaining.

China"s investment in Aynak dovetails with the administration"s emerging strategy for ending the war in part by delivering on unfulfilled vows to better the lives of the poor Afghans who constitute the vast majority of the Taliban"s foot soldiers.

""The problem of security, the problem of the Taliban, we cannot solve these problems with the military,"" Ashraf said.

Site preparation work has begun. But it"ll be some years before state-owned China Metallurgical Construction Corp. can begin the projected 15 to 20 years of production at the site 30 miles south of Kabul.

Copper is used in everything from batteries and electrical wire to computers and coins. International prices were high when MCC won the 30-year lease in April 2007 — one estimate at that time put the potential earnings at $42 billion — but they"ve fallen dramatically since. Still, China and Afghanistan stand to make a healthy profit, especially if demand recovers.

Mar 11, 2009 11:32
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