On June 17, 2010, the New York Times and the rest of the US media led prominent stories on US geologists having discovered vast deposits of iron, copper, gold, lithium and other minerals in Afghanistan worth an estimated one trillion dollars. For good measure, the Afghan government claimed that actually their resources were worth three trillion dollars. While these reports are absolutely true, they are equally meaningless. Firstly, the discoveries are not new and were first brought to international attention by the Russian geologists in the 60s. Secondly, the figure of one trillion dollar is the technological value of the survey. More important is the financial feasibility report, particularly the economic feasibility report, which also includes the environmental impact. In Kabul, I had seen the Russian reports in the Ministry of Mines which covered almost all the discoveries being currently announced by the US media including the petroleum and gas deposits in northern Afghanistan. The Taliban Minister said with considerable irony that the Afghan government had been very concerned about the welfare of their future generations and therefore had made no attempt to exploit these resources. The Haji Gak iron deposits which are particularly mentioned in the reports were discovered in the early 60s and in fact our Commerce Minister Ghulam Farooque Khan had suggested that instead of the Karachi Steel Mill we should consider the alternative of a Steel Mill at Kalabagh using Afghan ore. However, there was difficulty in ensuring regular supplies given the Afghan attitude towards Pakistan in those days, because of the hard line policies of Daud Khan. It was a case of Pashtun adventurism winning over Pashtun pragmatism. After 50 years, the situation has not changed much. The only country bold enough to take the plunge to invest massively in Afghanistan has been China. The China Metallurgical Group and Jiangxi Copper Company won a bid in 2007 to develop the Aimak Copper Mine paying a royalty of $400 million per year to the Afghan government, whose total revenues currently are at one billion dollars. The Chinese are also planning to put up a power plant in Logar to run the copper mine and also build local road connections and transnational railways lines in an investment that is expected to reach four billion dollars. According to reports, the Aimak Mine alone is expected to produce 12 million tons of copper out of Afghanistans total estimated reserves of 60 million tons of copper. Details of the US Geological Survey conducted in 2007 are as follows: Mineral Potential Value in current prices ($ Billion) Iron 421 Copper 274 Niobium 81 Cobalt 51 Gold 25 Molybdenum 24 Rare Earth Elements 7 Asbestos 6 Silver 5 Potash 5 Aluminium 4 Graphite 1 Lapis Lazuli 1 Fluorite 1 Phosphorus 1 Led, Zinc, Mercury, Strontium 1 Sulphur, Talc, Magnetite, Kaolin 1 In their preliminary assessment of non-fuel mineral resources for Afghanistan, the US Geological Survey estimated that 2.2 billion tons of iron was available in the Haji Gak deposit alone with 69 percent iron. In addition, there are also considerable deposits between 47 and 68 percent iron, making it one of the largest iron deposits in Asia. So far, the Indian companies are in the lead bidding for the mining rights including Essar Minerals, Rashtriya Ispat Nigam and Ispat Industries. The Chinese Metallurgical Group was also a bidder but pulled out after allegations that it had won the Aymak copper contract by paying $30 million in bribes. Besides these non-fuel deposits the Russian had discovered considerable quantities of oil and gas in the area around Mazar-i-Sharif, some of which is already being exploited, with small fertiliser factory. There are also confirmed deposits of Naphtha in the Polekhumri region, while reports of petroleum deposits in the Kandhar and Helmand region. Despite this immense geological wealth many of the deposits are in zones dominated by the insurgency and have little or no infrastructure. In the Afghan bureaucracy, corruption is high and government performance and rule of law are weak. Afghanistan therefore has a long way to go before it can take advantage of its mineral wealth. We had a similar experience in Pakistan where we have been unable to utilise the Thar coal deposits or the copper deposits at Rekodiq (which are comparable to those at Aimak). The New York Times seems to have realised that it had been a victim of media hype and within one week it accepted the conventional wisdom that the minerals in Afghanistan required considerable investment for mining and processing, as well as for infrastructure development in railways and roads, which would be particularly expensive in the mountainous and undeveloped regions of Afghanistan where these minerals are normally found. Gold, silver, copper and other minerals are usually located in ore that must be reached by tunnel, blasted out by the tons, carried to the surface and ground to powder for processing. Digging the shafts and building elevators, processing plants and infrastructure can cost several billion dollars for a single mining operation. Economic recoverability also requires that a resource cannot only be produced, but also exported for less money than its sale value, in order to provide enough return on investment to account for the associated risks of the investor. This assumes that the US military would succeed in securing the lines and supply lines and they would be in the country for the next 10 years in order for the project to bear fruit. Electricity plants also need to be built close to the sites since mining projects require enormous amount of energy. In Afghanistan, despite the passage of 10 years, the US has still not been able to provide the generators to make functional the Kajkai hydroelectric project on Helmand River. It seems unlikely therefore that the new power projects could be established within the economic framework of time relevant to the mining projects. The writer is a former ambassador.