No, Afghanistan’s mines are not worth £800 billion

The government appears powerless to take back the operation and officials admit that the Taliban have greater control than they do over Afghanistan’s mining industry and its mineral wealth, valued at more than £800 billion. In fact, mining has become the group’s second-biggest income source after the opium trade, while government revenues have dwindled.

Lapis, prized for its intense blue colour, has been mined in Afghanistan for 9,000 years.

Nato forces hoped that the country’s mineral wealth would underpin its recovery when they ended combat operations in 2014. However, riddled with corruption and damned by mismanagement, the mining industry has been reduced to a shambles as the state is fractured by the insurgency.

Sigh. That £800 billion comes from a Pentagon report (of $1 trillion). But that’s the value of the minerals after they have been dug up and sold. It does not include the costs of doing the digging up, it’s a gross revenue number, not a margin one.

The Taliban are mining lapis lazuli in northern Afghanistan, marble and coal in central, southern and western provinces, and gypsum, chrome ore and talc in the east. A report by the Global Witness NGO last year placed their earnings from lapis alone at £16 million a year.

Even that’s not right:

In 2014 the two mining areas of Deodarra and Kuran wa Munjan alone provided around $20m to armed groups, according to rough but conservative estimates – equivalent to the government’s declared revenue from the entire extractive sector in 2013. This includes about $18m to Commander Malek and informal armed groups linked to him, and more than $1m each to the Taliban and to armed groups mainly allegedly associated with Zulmai Mujadidi.
Armed groups made at least $12m from lapis in 2015, according to rough but credible estimates, with a government ban on the trade in early 2015 countered by massive smuggling through the Panjshir valley. The Taliban increased their share of this as their strength grew, to an estimated $4m. As of mid 2016, payments to the Taliban reportedly amount to at least 50% of the revenue from the mines.

Sigh.

10 comments on “No, Afghanistan’s mines are not worth £800 billion

  1. I think the real question is why are journalists so f*cking stupid? What are they learning on their journalism degree courses – apart from pop Marxism?

    How hard is it to teach them even the basics of the real world? Why do the editors never learn from angry readers’ letters? Why don’t they make them learn something about the subjects they cover?

    Newspapers are dying. This is, at best, a mild shame. But their f**king incompetence means it is a suicide, not a homicide. If they can’t understand the simplest concepts, why should the rest of us put up with being patronized by our patent inferiors?

  2. You can see why some of them complained about the BTL comments, and wanted them gone, can’t you?

    E.g.
    http://blogs.spectator.co.uk/2016/09/comment-threads-closing-thankfully-underpants-brigade-won/

    With one reader replying:

    “Now we face competition … ” betrays the real reason why the comment threads are being turned off. Columnists didn’t like the tripe that they often spouted being so quickly held up to scrutiny at the foot of their columns.”

  3. Meanwhile in other news an industry front group touts for lots of business:

    http://www.bbc.co.uk/news/business-39107973

    You can tell even the BBC is a bit embarrassed by this, as they leave it to the eighth paragraph to identify who the report is from, merely coyly referring to them as “experts” in the first paragraph.

  4. I rather like lapis. I was looking at a necklace earing combination before Xmas. Beautiful subtle colour, so well complimented by yellow gold. But Her Ladyship was totally disinterested. Prefers the vibrancy of turquoise/silver or jade..
    Which is the problem. There really isn’t much of a market for the stuff. The art paint industry still consumes some, but hardly in large quantities. Increase the supply & you’d simply bottom the market. So unless you can convince one of the Royal Spouses to develop a lapis fetish, whatever value they’re putting on it as a “resource” is mostly fantacy.

  5. The art paint industry still consumes some, but hardly in large quantities.

    It’s that damned Reformation again. If it weren’t for that little upset, there’d still be a market for paintings of the BVM.

  6. What do you want, accurate information or a scary clickbait headline? I think it’s pretty clear which one the media prefer.

  7. Afghan lapis, given the Afghanis, was doomed as a commodity then they discovered mountains full of the stuff (which both I and Mrs SE like) in Chile.

    All her really good lapis comes from Chile. I got some cheap cuffli is in Bastion. Bought jade for her from Kaf.

  8. @So Much For Subtlety
    “I think the real question is why are journalists so f*cking stupid? What are they learning on their journalism degree courses – apart from pop Marxism?”

    There is more to a Journalism degree than pop Marxism?
    Who knew?

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