Huge excitement about people finding lots of metals in Afghanistan.
Afghanistan has nearly $US1 trillion in untapped mineral deposits, far more than previously thought and enough to turn a country devastated by decades of war into one of the most important mining centres in the world, according to senior US officials.
The NYT had the original report:
The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.
Hmm. OK, of that huge pile of riches, what do we actually have?
Iron ore, $420 billion.
Well, sorta, maybe. The big thing about iron ore is that it is a) cheap and b) bulky. The most important thing about it then is transport. Essentially the only market for it is China and even that would require the building of a dedicated railway (over the Himalayas?). While it does have value, yes, it\’s not as high as they seem to think.
Next is copper at $274 billion.
Yes, OK, but you\’ll not be shipping copper concentrates out (see iron ore above). You\’ll want to produce copper and then ship that out. Need lots of electricity for that: rather a large infrastructure cost that. But yes, OK, this is valuable.
Niobium at $80 billion?
No. This is 260 times the value of annual US consumption of the metal. Try bringing that amount to market and you\’ll collapse the price. You could bring it to market over 500 years or so without collapsing that price but then you do need to apply some sort of discount to the value.
The others don\’t seem too far out of line (25 billions worth of Moly looks a little high for the same reason as the niobium) but also don\’t look all that unusual. $7 billion of rare earths? Meh….there\’s no rarity of them at all: it\’s processing capability that is rare. Would cost you $500 million (there\’s a plan for a $400 million plant in hte US….and they\’ve got a decent infrastructure to build it upon) to build that.
Basically, what they\’ve done, is give the value of the metals at current market prices. They\’ve not adjusted either for the likely change in values if such quantities were mined….nor the cost of mining.