UK to give Afghanistan £10m to fund mining programme

File photo of Afghan coal miner (June 2010) Afghanistan has vast mineral deposits which on paper are worth trillions of dollars

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The UK is to fund a £10m programme to help Afghanistan exploit its huge natural resources, the prime minister has revealed.

Estimates of what lies underground in Afghanistan range from $1-3tn worth of gold, gems, iron ore, and oil and gas.

David Cameron announced the three-year funding to support the Afghan Ministry of Mines at an event at Downing Street.

There have been claims that the award of mining contracts after the fall of the Taliban was affected by corruption.

The award of a 30-year contract to a Chinese consortium to exploit the Aynak copper mine in Logar province came under particular criticism.

Details of the 2007 deal with China Metallurgical Group Corporation have still not been made public, fuelling rumours of bribery and kick-backs.

The World Bank has appealed for future Afghan mining concessions to be better regulated and more transparent, and Britain's new support is aimed at improving that process.

Prosperity and growth

The announcement came as Mr Cameron hosted dozens of UK investors and mining contractors at Downing Street.

He said the UK had already played "a huge and honourable role" in stabilising Afghanistan, but that the country needed "prosperity, growth, jobs, investment and wealth".

British mining companies welcomed the announcement.

BBC international development correspondent David Loyn said the companies have called for a level playing field to compete. Improving Afghan technical competence, and ensuring a transparent process, should help to secure that.

ESTIMATED DEPOSITS

  • Iron: $421bn
  • Copper: $274bn
  • Niobium: $81bn
  • Cobalt: $51bn
  • Gold: $25bn

But he said the huge investment already made by companies from China and India reduces the opportunity for others.

Sadat Naderi, a prominent Kabul businessman, who has links with the British company Afghan Gold and Minerals, said that it is not too late. He admitted that there had previously been corruption, but there was a desire in Afghanistan to make the country secure for foreign investment.

The Afghan Minister of Mines, Wahidullah Shahrani, who has been in his post for three years, has criticised the way things were done in the past.

He welcomed the new support, saying what Afghanistan needed was "sustainable development for its people in the long term."

Our correspondent said that if security improved, there will be a new rush to exploit Afghan mining opportunities.

He said Afghanistan would not want to repeat the experience of many other post-conflict countries, particularly in Africa, where large resources proved to be a curse.

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