The Islamist regime in Afghanistan has issued hundreds of agreements to exploit the nation’s rich deposits of gold, gemstones, and other minerals.
Afghanistan, known for its mining potential, sits atop an estimated $1 trillion worth of natural resources that have remained largely untapped due to prolonged conflict.
Since the Taliban regained control from the Western-supported government in 2021, they have secured over 200 mining deals valued in the billions. These potentially lucrative contracts involve the extraction of gold, gemstones, and minerals like chromite, essential for steel production. The beneficiaries include both local Afghan businesses and international investors from China, Iran, and other countries.
After taking power, the Taliban swiftly increased the issuance of mining contracts, nearly doubling the rate compared to the three years prior, as revealed by an analysis from the Financial Times and the UK-based Centre for Information Resilience.
Rahimullah Samandar, the former CEO of the Afghanistan Chamber of Industries and Mines, recalls how the mining ministry was inundated with aspiring miners, including many from within the Taliban ranks, as the group worked to maintain control.
“Small and big Taliban commanders were coming to my office and asking, ‘How can I get a mine?'” he said. “I would ask them, ‘Do you have any experience in mining?’ ‘I don’t.’ ‘Do you have a partner?’ ‘I don’t.’ ‘Do you have money?’ ‘I don’t.'”
Due to inconsistent trade data, measuring the exact scale of activity is challenging. However, out of 128 contract sites reviewed by the FT, 88 showed signs of either development or expansion.
Many of Afghanistan’s mines are still in the early stages of development, but the Taliban’s initiatives have started to yield results. According to the World Bank, Afghanistan’s domestic revenue increased by 22 percent year-on-year in April and May, largely due to the auctioning of mines and resources such as oil, emeralds, and nephrite, a type of jade highly valued in China.
If the Taliban can successfully revive Afghanistan’s mining sector, they will achieve what two decades of Western-backed efforts could not, highlighting the failures of America’s $2 trillion war in the country.
The mining industry could help the Taliban forge new alliances, as foreign powers like China, Russia, and Iran look to exploit Afghanistan’s rich mineral wealth. This revenue would be crucial in a nation where a quarter of the 40 million population is at risk of famine.
However, significant challenges remain. Miners must navigate Afghanistan’s struggling economy, international sanctions, and a regime isolated by the West for its oppressive policies towards women and girls.
Moreover, success in mining might lead to complications. Western analysts worry that the influx of funds from a thriving industry could both finance and empower the Taliban, reducing their motivation to moderate their most extreme policies.
“When the people of Afghanistan are facing poverty and unemployment, it’s essential that we tap into our natural resources,” said Suhail Shaheen, head of the Taliban’s political office in Doha. “We welcome investment from foreign countries in the mining sector.”
Experts estimate that during the war, illegal mining dominated Afghanistan, with corrupt officials and militants, including the Taliban, overseeing the operations to fund their insurgency.
Following their victory over local rivals after the West’s chaotic withdrawal, the Taliban began issuing small-scale contracts to Afghan entrepreneurs to mine nephrite, which accounts for a third of the mining deals announced so far. To control the trade, the Islamists cracked down on corruption, increased taxes, and deployed loyal officials to oversee highway and border posts, according to an April study funded by the UK Foreign Office.
“Before, there were huge bureaucratic problems, lots of corruption, and many regional warlords,” said Mansour Ahmadzai, an Afghan partner in a nephrite mine in Nangarhar whose stones are sold by middlemen to China. The takeover was “a golden chance to come forward and invest.”
The Taliban regime turned to innovative methods to scale up the mining industry. Shirbaz Kaminzadeh, co-founder of Afghan Invest, a company established under the Taliban in 2022, revealed that the cash-strapped rulers awarded him a mining block as payment for completing an unfinished power transmission project.
“Nowadays, we can go and work,” said Kaminzadeh, who holds the rights to several mines, including those for marble, lead, and zinc. “No one will touch us, no one will kidnap us. If we did 10 tonnes before, now we can do 100 tonnes.”
However, faced with a significant brain drain following their takeover, the Taliban cut corners to show progress. Samandar noted that the authorities bypassed essential technical, financial, and environmental checks necessary for a modern mining sector. Many new license holders soon realized that royalties on their products were excessively high, forcing them to return to the ministry for renegotiation.
“Afghanistan is likely to be looking to maximize revenue quickly,” said David Chambers, founder of the Center for Science in Public Participation, a non-profit providing technical assistance on mining to public interest groups and tribal governments. “So they’re liable to look the other way, which is going to come back and bite them.”
“If they’re really going to make money in the long run, they need to do it on a much bigger and more professional scale,” he added.
Afghanistan continues to hover on the brink of collapse, with its economy shrinking nearly 30 percent since 2020 and effectively cut off from the global banking system. This isolation has deepened since the Taliban barred women and girls from education and work.
Mining income often separates local communities from destitution but comes at a high cost. Mines consume scarce resources like water and are notorious for child labor. In 2022, the Financial Times found miners as young as eight working at a coal pit in northern Afghanistan, with no machinery or safety gear.
The Taliban have become more ambitious. Since August 2023, they have announced at least 15 “large-scale” mining deals worth more than $6.5 billion, according to the Centre for Information Resilience. Many of these deals have gone to foreign investors, with Chinese companies securing at least four licenses. This includes the China-Afghanistan Dayunlong Zeren Mining and Processing Company, a joint venture to mine gold in Takhar, a province bordering Tajikistan in northern Afghanistan.
Satellite imagery of the site shows rapid changes, including tracks for diggers and exploratory holes. Richard Brittan, managing director of geospatial company Alcis, said these were indicative of mining company work rather than artisanal mining. According to the Centre for Information Resilience (CIR), the company has advertised online for various positions, from engineers to translators.
This activity suggests that, while likely still in the exploration phase, the site has the potential to become a significant mine, according to Chambers. “When you start seeing drill pads at that density then you know that they’re getting pretty serious,” he said.
The Taliban are relying on China to help ease their international isolation. Last year, Beijing announced plans to expand its Belt and Road Initiative into Afghanistan and appointed an ambassador to the country.
Afghanistan is “an important partner,” China’s Ministry of Foreign Affairs told the FT. “China encourages Chinese companies to invest and start businesses in Afghanistan…[and] supports Afghanistan in making full use of its rich mineral resources.”
“The big question is, is the Chinese push real or not?” said Graeme Smith, a senior consultant at Crisis Group. However, he noted that China appeared to be considering long-term supplies.
The Taliban have also auctioned the Ghoryan iron ore deposit, a vast trove of metal near Iran, to Afghan, Turkish, and Iranian companies, although satellite imagery shows little evidence of development yet.
Many analysts doubt the Taliban’s ability to oversee an internationally competitive mining sector. Last year, the group surprised observers by announcing that a British company called GBM was involved in the Ghoryan iron ore development. However, when contacted by the FT, Michael Short, founder of UK-based GBM Ltd, said he had never heard of the project. He had attempted to mine a separate site under the previous government but pulled out before the Taliban’s takeover. “We gave up in the end,” he said.
International miners eyeing Afghanistan face numerous challenges, from war-ravaged infrastructure to the threat of US sanctions. Although the US Treasury announced an exemption to shield commercial transactions, analysts say few banks would risk dealing with the regime.
One international official noted that while companies from China and elsewhere were eager to secure long-term mining rights in Afghanistan, they seemed hesitant to invest heavily in the country yet.
Afghanistan’s mines are “interesting enough for people to put in money to hedge on contract licenses,” the official said. “But in terms of actually putting boots on the ground, and machinery on the ground…the legal framework, the political framework, the potential of falling foul of sanctions all makes it very high risk.”
Despite these challenges, the country’s new prospectors remain undaunted. Ahmadzai, the gemstone miner, said he recently received a sample of higher-quality nephrite from the remote northeast and was hoping to expand. “If Afghanistan’s mines are not extracted now,” he asked, “when?”
