Monday, June 14, 2010

Weening Afghanistan off the opium poppy? Who needs Mellow Yellow? Bootstrapping by mining. Batteries to the world!

A huge development.

It's old news that Afghanistan is far too poor, and far too dependent on the illegal opium trade. It's also an old saw that there isn't anything that is perceived by the natives as a viable substitute for the income derived from the drug trade. A while back, there was a story about what I called the Mellow Yellow Solution. But, even if saffron was to become a major cash crop, the market is not as large, permanent, and attractive to foreign investment as would be vital mineral deposits. Suppose that Afghanistan had immense deposits of minerals vital to industry, and vital to our information dependent economy. Say they had seemingly limitless lithium essential for the batteries for all of the Blackberry using, I Pad using, I phone using, Net book using..etc., geeks of the world. Or, suppose that copper was to be found a-plenty? Gold?

Well, stop supposing. It's a fact, if this story is accurate. The incentive to invest in Afghanistan is certainly there. This has the potential not merely to match the income generated by the opium trade, but to outmatch it many times over. This is just the central piece the country needs, a realistic opportunity for prosperity, and a way to not only ween themselves off the poppy, but international aid. And, should mining eradicate or greatly reduce the poppy trade, it would strangle the blood supply for the Taliban crime family. Not to mention, a prosperous Afghanistan would be a welcome balance, a welcome ally that would apply some much needed pressure on our ambiguous friends the Pakistanis, what with the ISI's penchant for playing both sides.

This could be the cornerstone of some sort of Marshall Plan for Afghanistan, a sustainable and self funded Marshall plan. Big news indeed.

Key bit:

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.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and Blackberry's.

The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists. The Afghan government and President Hamid Karzai were recently briefed, American officials said.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

“There is stunning potential here,” Gen. David H. Petraeus, commander of the United States Central Command, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion.

“This will become the backbone of the Afghan economy,” said Jalil Jumriany, an adviser to the Afghan minister of mines.