Afghanistan | LandLinks


Although Afghanistan has abundant mineral resources, most have not been successfully explored or developed. The most recent and modern sector analyses were undertaken through joint geologic activities from 2009 to 2011 between the U.S. Geological Survey (USGS), the U.S. Department of Defense Task Force for Business and Stability Operations (TFBSO), the then Ministry of Mines, which is now the Ministry of Mines and Petroleum (MoMP), and Afghanistan Geological Survey (AGS). The country possesses a wide range of mineral resources, including: base and precious metals; construction minerals; nonmetallic minerals; oil and gas; precious and semiprecious stones; and rare-earth elements. Critical industrial metals such as lithium are also present. Precise mineral production data are not readily available due to 1) numerous undocumented artisanal and small- to medium-scale mining operations throughout Afghanistan and 2) limited access to the mines to verify reported data because of the security situation. In general, large-scale mining is undertaken for chromium, copper, gold, iron, steel, iron and marble. Mineral resources as chromite, coal, gypsum, lime, marble, natural gas, salt and talc continue to be exploited through artisanal and small- to medium-scale mining (Choi 2014; GIRoA 2012; Peters et al. 2013; USGS 2013).

Untapped mineral resources are estimated to be worth more than 1 trillion US dollars, though the figure is disputed to be either higher or lower, depending upon the source. The potential for at least 24 world-class mineral deposits have been identified as “Areas of Interest,” which represent both the mineral and its geographic location. For example, these areas include Badakshan (gold), Balkhab (copper), Haji-Gak (iron), Northern Aynak (copper, cobalt and chromite), Zarkashan (copper and gold), Kundalan (copper and gold), Khanneshin (carbonatite) and Dusar-Shaida (copper and tin). Mineral resources in general are located along two corridors: The first runs from Herat in the far west to Badakhshan in the northeast and contains significant deposits of iron, gold, copper, barite, coal and gemstones. The second corridor, the southern extension of the Tethyan Eurasian Mineral Belt (TEMB), covers a thin strip of southern Afghanistan and extends north-east through Helmand, Kandahar, Zabol and Ghazni provinces. This belt contains numerous copper, gold, molybdenum, zinc, lead and chromite deposits. Many mineral resources are also located near the north-east border of Pakistan (The Telegraph, 2010; World Bank 2016; GIRoA 2012).

The Afghan Ministry of Mines and Petroleum has indicated that the annual income through mining could reach as high 3.5 billion USD, covering 77 percent of the total core budget of the Afghan government. However, despite the potential in the sector, it remains undeveloped due to poor access, lack of energy and water, which is needed in mining operations, and the challenges of having such a diversity of mineral resources that require different exploration approaches, mining and metallurgical techniques (Loewenstein 2014).

One of the biggest challenges, however, is security. War and neglect have led to underproduction of mineral resources, unlicensed operations and smuggling, and untapped energy resources. Unexploded ordnance and land mines in mineral-producing areas have deterred development. Along the border of Pakistan, warlords and local elites have taken control of and expanded mineral operations. Thus, illegal mining is rampant throughout Afghanistan, with more than 2,000 such sites raising money for the insurgency. There is massive mineral theft by the Taliban, particularly in Logar Province. According to MoMP, many of these resources are smuggled out of the country, which is affecting the country’s economic growth and stability (Peters et al 2014; USGS 2013; World Bank 2016).

In the context of declining aid, the extractives sector is the country’s primary focus to increase government revenue and to generate foreign exchange income. Public investments required to mobilize the mining sector would cost around 350 million USD per year (World Bank 2016).


Under the Constitution, Afghanistan’s underground minerals belong to the State. The most recent Mineral Law, adopted in 2014, governs the ownership, control, prospecting, exploration, exploitation, extraction, marketing, sale and export of minerals on the territory of Afghanistan. Previous versions of the law have been amended many times, but these amendments have not served to stabilize the sector. Consistent with the Constitution, the Mineral Law provides that all deposits of minerals on or under Afghanistan or in its watercourses are the exclusive property of the State. A surface land interest does not include rights to minerals. The Ministry of Mines and Petroleum (MoMP) is authorized to grant mineral rights in accordance with the provisions of the law. The Mineral Law refers many key issues foresolution by other, largely undrafted regulations, thereby providing ample space for corrupt actors to abuse the system. The Income Tax Law of 2009, Environment Law and Investment Law regulate different aspects of the manning sector as well (GIRoA 2014; Paiman 2017).

In principle, legal mining activities can occur only under a contract issued on behalf of the state by the MoMP. Royalties are negotiated separately for each contract and are specified in the contract, though some broad guidelines for different minerals are in place. In addition, mining enterprises, like other businesses, are required to pay tax on their profits, in accordance with the country’s income tax law.

However, the Mineral Law does not clearly delineate the amount of royalties to be paid, leaving this issue to be dealt with in subsequent law. The Mineral Law and the Environment Law require mining companies to conduct a social and environment impact studies before beginning extraction. Perceived deficiencies in the legal framework have been noted, including the absence of transparency in the bidding process and allocation of licenses, enforcement of requirements and terms contracts and clear penalties for violations of the Mineral Law (GIRoA 2014; Hart Group 2017).

A new set of amendments to the 2014 Law have been advocated for and proposed as of 2017. These amendments seek to stabilize and increase transparency within the sector and include: publication of project-level payment and production figures; a public register of extractive sector companies; enhanced controls on owners; provision for local employment in mining projects; mechanisms to improve community monitoring of mining projects such transparency in ownership, royalties and financial information (Integrity Watch Afghanistan 2017).


Under the Mineral Law, MoMP can grant mineral rights to individuals and entities who are Afghanistan citizens or citizens of foreign countries legally entitled to reside or do business in Afghanistan. By law, high-ranking state officials, magistrates, lawyers, members of the armed forces, police and other public employees cannot hold mineral rights. In fact, mining companies that obtain contracts tend to be owned by politically connected persons, including, in many cases, members of the Afghan parliament (MPs), their family members, their associates and power holders with access to armed groups and their networks (GIRoA 2014; Bird and Noorani 2017).

The Mineral Law (Article 19) provides for five types of mining licenses: the reconnaissance license, for assessment of mines; the exploration license, for digging and determining a mine’s volume; the exploitation license, for extraction (maximum of 30 years with the possibility of an extension); small-scale mining license; and the artisanal license. The last two types of licenses are issued specifically for unique classes of small mines. In principle, a transparent and competitive bidding process for exploration and exploitation licenses is articulated. Bid evaluations are based upon: technical and financial capabilities of the bidder; proposed socio-economic benefits; environmental protection; potential government revenues; and introduction of new technology. The owner of an exploration license is required to prepare an Environmental and Social Impact Report (ESIR), feasibility study and environment protection plan. Mine operators in all cases are required to submit their exploration plans to MoMP first for approval and then are expected to submit their findings and the various studies before an exploitation license is granted. Parties can lose their rights under the Mineral Law if they fail to pay license fees, fail to abide by the terms of the mineral right granted or fail to conduct exploration or extraction activities as contracted. Mining contract provisions for the most part are not observed (GIRoA 2014; Bird and Noorani 20).

Despite the legal framework, it is estimated that illegal mining operations outnumber legal ones by a factor of five to six. Poor security and MoMP’s lack of capacity to monitor remote locales are two of the underlying factors. The reasons for rampant illegality are complex, but the post-2001 Afghan government has been politically penetrated by networks of power holders with their own access to the means of organized armed violence—whose members are involved in, or at least benefiting from, ongoing mineral exploitation. Thus, illegal mining operations are run by, inter alia, local residents, security agencies and provincial officials, anti-government forces and local warlords (Noorani 2015; Paiman 2017).


The Ministry of Mines and Petroleum (MoMP) is responsible for functions relating to mineral exploration, licensing, development and mining. MoMP is obliged to regulate mineral activities in accordance with the 2010 Mineral Law. MoMP’s duties include: formulating and implementing policies (including promoting private-sector investment); proposing to the Council of Ministers the classification, declassification or reclassification of an area as prohibited for mineral activities; granting, transferring and canceling mineral rights; supervising mineral activities of public entities; and assessing and ensuring the collection of royalties. MoMP can engage in exploration and extraction of minerals by itself, through other public entities or in association with the private sector. The role of MoMP has changed from a mining entity to a facilitator for providing opportunities for the private sector (GIRoA 2014; Paiman 2017).

MoMP has three deputy ministers and numerous departments, including Legal, Policy, Inspections, Surveying, Cadastre, Geology and Survey and Small-scale mining, among others. The Policy Department coordinates foreign assistance and contracts; the Cadastre Department determines the volume of mines, processes the contracts and collects revenue; the Inspection Department monitors and evaluates the implementation of contracts; the Legal Department develops the contracts and provides legal services; the Geology Survey Department conducts geological survey and collects mines’ information; and the Small-Scale Mining Department organizes the affairs of small mines. The Mineral Law provides for the establishment of an Inter-Ministerial Commission to monitor bidding processes, approve mining contracts, grant exemptions from surface rent and approve the royalty rate (GIRoA 2017; GIRoA 2014).

The Mining Law establishes a Mining Cadastre within the MoMP. The cadastre is responsible for assessing fees for the processing of applications for mineral rights, reviewing and processing applications for mineral rights, executing the technical and environmental evaluation of applications for mineral rights, registering mineral rights granted and refused, registering rights terminated, extended or transferred, registering security interests and developing Cadastral Survey Maps. The Mining Law creates an Environmental Protection Department within MoMP for the protection of the environment in connection with mining activities. The Environmental Protection Department is responsible for the technical evaluation of mitigation and rehabilitation plans, Environmental Impact Statements and Environmental Management Plans. The Department also monitors compliance with environmental requirements and cooperates with other state agencies that are responsible for protection of the environment, the social welfare of the local populations and natural and cultural heritage The National Environment Protection Agency (NEPA) is authorized to evaluate the environmental aspects of mining contracts. If the environmental standards are not observed, NEPA has authority to reject the license and/or contract, but NEPA usually lacks the information needed to take such an action and furthermore is subject to pressure from powerful outside interests (GIRoA 2014; Paiman 2017).

MoMP’s Inspection Department and Provincial Inspection Units are responsible for monitoring and inspecting the mining sector, including tracking compliance with contract terms and measuring the amount of minerals extracted. Civil-society organizations and local residents can play a valuable watchdog role as well but lack any official standing. In addition, Parliament’s oversight role is weak to nonexistent, further centralizing authority in the hands of MoMP (Hart Group 2017).


In March 2017, President Ghani nominated a new Minister of Mines and Petroleum after a year-long vacancy in the position. Civil-society organizations welcomed the nomination, which they hope will lead to greater reforms, transparency and efficiency. The Government became a candidate for the Extractive Industries Transparency Initiative (EITI) in 2009. EITI is founded on principles to put natural resources to prudent use for the benefit of citizens in a transparent and accountable manner by disclosing the revenue that a State has received from the sector and the payments made by a company to the State. A candidate country for the EITI has to implement the seven requirements of EITI to become a compliant country. Afghanistan has completed the five-year cycle for implementation of the EITI, but it has still not been granted compliant status. Afghanistan has produced five reconciliation EITI reports, but most of them are deficient and have been critiqued by civil society for lacking data (Nourani and Brueckeri 2016; Hart Group 2017).


USAID’s Mining Investment and Development for Afghanistan Sustainability (MIDAS) Project 2013-2017 assists the Afghan Government to responsibly develop the nation’s mining industry by improving its ability to plan, design and implement mining concessions through transparent tender processes. MIDAS’ goal is to make Afghanistan’s mining industry a key source of government revenues and expand the skilled labor force to include women playing a role in the mineral development. MIDAS guides the Afghan Government to implement legal and regulatory reforms for the industry, providing technical assistance to MoMP. Initiatives within MIDAS include assisting the Afghan Government to develop transparent bidding processes, contracting procedures to adopt and implement mining laws and regulations according to international best practices and helping MoMP develop expertise in data analysis and mineral deposit management (USAID 2016).

GIZ has been active in Afghanistan’s mining sector by way of programs such as the Academic Mining Education in Afghanistan (AMEA) Project 2014-2017. The project aims to overhaul the technical content of educational courses relating to mining align them to the needs of the labor market, economy and administration so that the revenue-generating potential of the raw materials sector can be utilized to the full. In addition to technical and practical training for teaching staff, courses of direct relevance to the mining industry are being developed and integrated into the curricula. Regional partnerships are intended to facilitate academic networking with the international research and teaching community. The two-year ‘Govern4Afg’ project 2015-2017 was also launched by German and Afghan partners to establish a platform for policy dialogue on governance topics, including good mining governance. The project includes assisting the MoMP and Ministry of Finance in developing standardized accounting, reporting and auditing system will help improve governance of the natural resources and avoid loss of revenues. Finally, the Promotion of Mineral Governance Project 2013-2016 provided theoretical and practical training for the staff of the MoMP, equipping them with the necessary technical skills to identify mineral resource deposits and for the sustainable use of those resources (GIZ 2016).

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: