$1 Trillion In Minerals Found In Afghanistan 688
a user writes "American geologists working with the Pentagon have discovered deposits of iron, copper, cobalt, gold, and lithium of incredible bounty, amounting to nearly $1 trillion. In fact, the lithium deposits are so vast, an internal Pentagon memo has stated that Afghanistan could become the 'Saudi Arabia of lithium.' The wealth of the deposits completely flattens the current GDP of Afghanistan, estimated at about $12 billion. Mining would completely transform the economy of Afghanistan, which presently is propped up by the opium trade and foreign aid. However, it could take decades for extraction to reach its full potential due to the war, the lack of heavy industry in the country, and a corrupt national government."
Re:And if you (Score:5, Informative)
Don't forget China shares a border with Afghanistan
Re:Dammit! (Score:5, Informative)
Beter later than never. (Score:5, Informative)
The Economist had an interesting story about it something like one year ago. I couldn't find it unfortunately.
Re:And if you (Score:1, Informative)
Yes and china wants to encourage a super rich bunch of islamic nutters rights on its doorstep!
Look to expect the chinese to come in to help mine, or defend the taliban against those nasty western imperialists as long as they get access to the minerals.
Either way with trillions to be made, somehow I think the taliban are going to start getting ratted out soon enough as normal ahgans realise these nutters are going to help keep everyone poor!
Comment removed (Score:5, Informative)
Re:That's Great But... (Score:4, Informative)
The poor will see nothing. (Score:5, Informative)
Sadly, no. You must start with a healthy government before mineral riches become a boon to the average citizen, let alone the poor.
http://www.hulu.com/watch/91538/vanguard-rebels-in-the-pipeline [hulu.com]
Re:CNN said this could make it the saudi arabia (Score:5, Informative)
Saudi Arabia is not poor, and by that I mean the people are not poor. The government spreads the oil money around a fair bit. They import people to be poor, er, I mean to do the work the Saudis don't want to.
Re:CNN said this could make it the saudi arabia (Score:4, Informative)
".....The sharing of family wealth has been a critical component in maintaining the semblance of a united front within the royal family. An essential part of family wealth is the Kingdom in its physical entirety, which the Al Saud view as a totally owned family asset. Whether through the co-mingling of personal & state funds from lucrative government positions, huge land allocations, direct allotments of crude oil to sell in the open market, segmental controls in the economy, special preferences for the award of major contracts, outright cash handouts, and astronomical monthly allowances, - all billed to the national exchequer - all told, the financial impact may have exceeded 40% of the Kingdom's annual budget during the reign of King Fahd. Over decades of oil revenue-generated expansion, estimates of royal receipts have varied, ranging as low as an unlikely $50 billion and as high as well over $1 trillion. [5]. This method of wealth distribution has allowed many of the senior princes & princesses to accumulate largely unauditable wealth and, in turn, pay out, in cash or kind, to lesser royals and commoners, and thereby gaining political influence through their own largesse.
During periods of high oil prices as were the late 70s, early 80s, and again, immediately after the 2003 US invasion of Iraq, national income has outpaced the developmental needs & social obligations of the Saudi government and the effects of royal skimming were diminished. From the mid 80s through the 90s, when international crude oil prices dropped to the teens and below, the subsequent shortfall in income, and the availability of surprisingly limited financial reserves (when compared to such countries as Kuwait and the United Arab Emirates which continued to grow during crude price droughts because of dividends generated from years of prudent investments.)[6]. According to well-publicized but unsubstantiated reports, King Abdullah has intentions to reduce the Al Saud share of the budget, an act which may sow discontent within the royal family, but would be popular with the Kingdom's citizenry."
Fact is no one knows really how much the Royal family keep and how much gets shared.
Saudi Arabia has the wealth to never export oil but to process it all on shore. INstead that potential excess to invest in expensive downstream processing goes in to the royal family.
Afghanistan will be the same.
Have a read of :
http://www.amazon.com/Plowing-Sea-Nurturing-Sources-Developing/dp/0875847617 [amazon.com]
Mineral deposits almost never reduce poverty. (Score:5, Informative)
The vast majority (99%+) of Sierra Loeneans who spend their lives in poverty, toiling to find diamonds, have never seen a finished and cut diamond. Many never even find a single diamond. Sierra Leone ranks amongst the five least developed countries.
A single gold mine in Mali will produce $1.5BN (USD) and has made a 0.07% reinvestment ($100k) in schools from its World Bank loan. The words of one worker, “[w]e read on the Internet that AngloGold has pronounced that Morila is the most profitable gold mine in the world, and yet most workers here get no lodging or training, or even health care. In South Africa, AngloGold is paying for the anti-retrovirals for its staff that are HIV-positive, and here they take all our medical costs out of our salaries.” Mine companies often pay only hundreds of thousands of dollars per year in lease fees.
Rutile is 95% titanium dioxide and Sierra Leone’s deposits of rutile may account for as much as 30% of the world’s supply, and the U.S. government lists it as a “strategic metal” to be stockpiled by the U.S. defense department. Sierra Leone is pock-marked by destroyed farmland and displaced communities, all in the name of rutile and diamond minining.
Another poster made an allusion to the mid-east, but Africa I think is a much better example as oil actually has been good for the average person in some mid-east countries, but these are fairly stable and developed countries. To look at natural resource reserves in unstable and undeveloped countries, versus stable, one only has to look at Oman and Yemen (both oil-rich and neighbors, one has GDP per capita 10x of the other). West Africa is a much better comparison to Afghanistan than Kuwait or the UAE (so if you want to make the mid-east comparison, skip Dubai and look at Yemen).
For a good read (and my source for much of the info above) I would recommend Joan Baxter's Dust from our Eyes.
Re:That's Great But... (Score:5, Informative)
Panama [wikipedia.org]. Bosnia [bbc.co.uk]. Also, you could ask any citizen of South Korea whether they'd rather be part of North Korea.
Re:That's Great But... (Score:4, Informative)
Saudi Arabia has not had its oil resources benefit the citizens. Last time I was there you could see white (whites are normally first class citizens and not immigrants) citizens beg on the streets. In saudi arabia you cant have a successful business because if you have, someone from the royal family will come by and tell you that you have a partner, or that you have a paper to sign. So no one in saudi tries to be successful at business, they just do as to go buy. Now, when I was there I saw people live in tents, no it was not during hajj season, and no it was not in some desert, it was inside a city, they were there for a few days, until the police came and throwed them away. In saudi arabia, citizens are poor, non-citizens are poor, only some privileged families are richer than average, these are the families that have contacts with the royal families. If you dont have contact with the royal family you are not even going to have functioning running water in your house.
Re:Mineral deposits almost never reduce poverty. (Score:5, Informative)
A few points
"Randgold Resources is also committed to the integration of environmental and social impact management into its business activities, and operates to international standards in this regard. On the social responsibility front, Morila last year spent more than US$160 000 on direct community development while Loulo spent more than US$240 000 on projects ranging from building and equipping schools to malaria control programmes," he said.
Bristow said Mali presented an outstanding example of what this approach could achieve. He noted that over the past 10 years, Randgold Resources alone had invested and reinvested more than US$1 billion there. During that time, the mines it developed at Morila and Loulo - in areas where there had been little economic activity other than subsistence farming - had paid US$500 million directly to the government in taxes, royalties and dividends. It was the largest single taxpayer in the country as well as its largest private-sector employer...
Mining can be damaging to the environment and to communities, and it is important that a close eye be kept on the industry, especially when it operates in countries with weak governments. But, the assumption that mines are inherently destructive, and that mining companies are inherently evil, is wrong.
Re:That's Great But... (Score:5, Informative)
My understanding is that US citizens must pay taxes in the USA even if they work abroad
As a US citizen that works abroad, I have to FILE taxes, but pay nothing. I basically declare that I made a certain amount working abroad and was taxed in that country. I declare I made 0 in the US, and I owe 0 US taxes. Apparently making rather large sums of money overseas is different, according to the H&R Block person who helps me file.
Also, bringing over 10K back into the US is taxed.
Note: I live in a 1st world country that the US is quite friendly with. It may be different in Afghanistan.
This is great news because this could help wipe out Afghanistan's poverty, the actual biggest obstacle to a functioning government.
That's exactly what happened everywhere oil or minerals have been discovered around the world. Middle East currently enjoys highest standard of living than the rest of the world thanks to half a century of massive oil extraction. Oh wait...
The United Arab Emirates has a fairly high standard of living because of the discovery of oil there. Before discovering it, they were scraping by on fishing.
... president of the UAE at its inception, ... directed oil revenues into healthcare, education and the national infrastructure. [bbc.co.uk]"
However, it's not a 1 step process. The 2nd step has a lot to do with it: "The late Sheikh Zayed,
Re:That's Great But... (Score:3, Informative)
The USA is unique in this requirement.
Since you have not submitted any forms you are in violation and while it is unlikly that you will be auidted while not living in the USA. However at some point you will probably go back to the USA and if you are audited then they can go back for around 7 years, long in cases of intentional fraud. Also depending on the country you are living in the IRS may have agreements with those countries to have them withhold money of USA citizens who are in tax problem.
Another problem is the state you are a citizen of but not resident, usually the last state you lived in. There are a handfull of states, that still expect taxes from you if you are not present in the state and living in forgein countries. Also the jurisdiction is totally false, it is very common for most countries to have actions that are illegal no matter where you are. If they find out you will be procecuted back in the your country, or if they find out and you are not present in the country there is a chance they will ask for your extradition, depending on treaties.
Re:That's Great But... (Score:5, Informative)
This is great news because this could help wipe out Afghanistan's poverty, the actual biggest obstacle to a functioning government.
http://en.wikipedia.org/wiki/Resource_curse
To address your points. (Score:5, Informative)
[2] Morila did get a $150M loan, yes (source: Joan Baxter). These types of loans usually call for community investment, that is the point of the World Bank (ostensibly anyway), to develop countries, not to make mine owners richer (although you can make a good argument for the inverse! See documentary: Life and Debt). As to whether they got this loan, I tend to trust Joan Baxter on this matter (she's a BBC correspondent, etc), although I don't have her book handy (I loaned it to a colleague).
[3] Claims of community reinvestment are now standard practice, sure. Note: you are citing mining companies press released. According to BP's web site they are "unaware of any reason" that would have caused their "share price movement." This just happens to be a timely example, but I think it's a good one, in that it's pretty obvious what caused their share price movement (I assume their argument would be that they are still quite profitable despite their current environmental catastrophe — while that may be true, this argument is spin, at best). I am extremely dubious of any claims made by mining interests as to what they are investing in communities. I'd rather believe neutral sources (like BBC reporters) who actually VISIT these areas and report on what they've seen. "Investing" $240,000 might mean they have a $200,000/yr consultant on payroll and he had $40,000 in expenses while "researching" how to help the community.
Quoting your press released, "in areas where there had been little economic activity other than subsistence farming..." Maybe those farmers were happy. Now there is "economic activity" there, but are the farmers more or less impoverished? I'll bet more. We are debating whether minerals in undeveloped countries bring people out of poverty, mind you, not whether mining companies pay taxes.
[4] Ghana is the most stable of western African countries, and thus the least applicable to Afghanistan. Nevertheless, I'm happy to talk about it. I'll be spending three months in Ghana this year doing infectious disease work, so I'm reasonably versed on its issues. As you stated, Ghana might be the best case example. Even so, a third of the country lives on less than a dollar a day, and although that percentage has come down a lot, and they may well meet their MDG for poverty by 2015, it's still not great. More than half the country lives on less than $2/day. 40 years ago South Korea and Ghana had the same per capita income (source: council on foreign relations). Still think mining has brought Ghanaians out of poverty? PPP GDP nowadays for Korea = $27000, Ghana = $1400. No contest as to who is still mired in poverty. I'll admit that I have a biased perspective, when I see children dying because their parents couldn't afford the twenty-six cent cost of a measles inoculation, three dollars for malaria treatment, or ten dollars for a bed net. And I have yet to witness mining or oil extraction doing much to help fix this. Sierra Leone, Nigeria, etc, the story is always the same
[5] To address the last sentence of your post, "But, the assumption that mines are inherently destructive, and that mining co
Re:That's Great But... (Score:4, Informative)
You are forgetting Saudi Arabia, made an incredibly wealthy country by any standard
What about the income of the average Saudi citizen? What is the distribution of incomes across all of society? Unequal distribution of wealth is a known driver of social unrest.
NY Times [nytimes.com]: "While poor Saudis line up for hours to obtain water in Jidda, others are able to take advantage of America's new-found disdain for gas-guzzling four-wheel-drives by snapping up imported cars."
American Chronicle [americanchronicle.com] "Currently, almost all of the oil wealth that flows into Saudi Arabia goes directly into the hands of the royal family. What that means is, roughly 5000 people control all of the money in the country leaving the other 20,850,000 living anywhere between lower middle class and abject poverty. "
Regardless, I would argue that Saudi Arabia is in fact getting more open - there are almost 8 million internet users [google.com]. Even behind an Internet filter, the average citizen is getting access to more information than they did 10 years ago.
Re:That's Great But... (Score:5, Informative)
Re:That's Great But... (Score:2, Informative)
Actually, for 2009, the foreign earned income exclusion is $91,400. If you claim housing deductions and have dependents the amount you make before you get taxed is even higher and IF you do make enough where there is a tax on your income you can claim the foreign tax credit and usually have that reduced to zero unless you make a fucking shitload of Crazy Bens.
To the GP, Americans don't normally pay taxes when they are overseas. Yes, it's a pain in the ass, but we are just required to report our earnings. This is just a misunderstanding by non-Americans. I know because I'm an American working overseas and have to repeatedly correct people who think we pay taxes.
Re:hmm (Score:1, Informative)
Oh grow-up with your conspiracy theories. The Afgan War started in 2001, and they've not yet begun harvesting these resources. If they were in it for the lithium, they would already be reaping the rewards already. The Iraq Gulf 2 started in 2003, and they were securing the oil as they were moving through the country,
I get real tired of this (Score:5, Informative)
If you don't understand finance on a national level there's nothing wrong with that, but please do not make stupid comments. No, China does not own the mortgage on the US. What's more they are not the loan shark who has a debt they can call due whenever they like (which cannot be done with a mortgage by the way, the term of the loan is specified by contract).
What China has done is invest in US securities. They have purchased US Treasure bonds/notes/etc. What those are is IOUs. They basically say "The US government promises to pay you X American dollars on Y date." The specifics vary, some pay interest at defined times, others are ones that pay face value on a given date, and are purchased at a discount. Regardless, they are all IOUs, the government promises to pay you money later. It isn't a debt you can call due, only way to get money early is to sell them, for a discount, to someone else.
What's more you may have noticed that I said they are paid in American dollars. All US securities are paid out in US dollar amounts. Also, with the exception of TIPS, they are specified in a numerical amount. So a note will pay $1000, or will pay 3% interest or the like. That means if the value of the US dollar drops drastically, so does the value of your security. They don't pay you in your own currency, so you can't say "Well our currency is worth 6 times as much now so you owe us 6 times what the note says." They pay in US dollars.
Then there's the fact that a large part of China's currency having value and legitimacy is the reserves of US securities they hold. It is an investment, like any other, and without it, their currency would have problems. May seem silly to you but it is how the world works.
So this is not a case of China holding all the cards. It is more a case of economic mutually assured destruction. For China to attempt to liquidate all their US holdings would be disastrous to them as well. Putting all those bonds on the market would badly depress prices as it shook confidence of investors. China would have to suffer a massive loss to be able to do it, which would hurt their economy likely worse than it hurt the US's.
Also there's a very real possibility they could lose everything. So as I said, the notes are only worth something because they US says they are. Also it isn't as though they are physical notes/bonds anymore, they are just entries in a computer at the Department of Treasury. So, suppose China threatens the US with the liquidation of all bonds if the US doesn't let them in Afghanistan. In response the US confers with their allies and reaches a deal: This amounts to economic warfare and by US and International law, in the cases of war assets of the country can be frozen or nulled. Or all Chinese securities go away. The other countries like this, they also own US securities and they don't want to see the value of these tank. Now, all of a sudden, china has nothing. A massive amount of their net worth has been wiped out. They can't use the notes as leverage because they are void.
So please, enough with the "China owns the US!" crap. No, they don't, neither do any of the other holders of US notes (including the government itself and many US citizens).
Re:Handy (Score:2, Informative)
You are forgetting the Pre-Marshall plan, that wanted Germany to be a agricultural country. You REALLY have to be ignorant to think THAT will work!.
Not to mention that Germany would have ZERO way of defending itself without the western allies.
Then, when the Red threat was to big, then only was the Marshall plan designed.
So the whole 'loving rebuilding of Western Germany' was only done so that Western Germany could act as a buffer against the Red Army.
Re:That's Great But... (Score:3, Informative)
Exactly. Sure, they've provided all kinds of great benefits to their populace, but their rate of spending is going to outpace their oil reserves in the future. Some estimate the unemployment levels to be 25% or more. Yeah, that's sustainable.
Relatedly: for a few years in the 80s, I worked with a number of Soviet researchers. They once commented that there was a shortage of paper in the USSR. I asked how that could be, with the vast forests it had -- couldn't they set up more paper mills? Their response: if the Soviets were in charge of the Sahara Desert, there would be a shortage of sand!
Re:That's Great But... (Score:3, Informative)
The Afghan government under Karzai (who are recognized by the world as the legal rulers of Afghanistan) has the right to pass whatever laws they like governing the running of their country.
If the land the minerals sits on is land owned by the government (e.g. land owned by the government and leased to farmers to farm on) then the government gets to say who can and cant mine those minerals. If the land is owned by private individuals, the government can still set rules for the mining of those minerals.
In either case, the government has the power to set royalties for those minerals and if the western mining companies dont want to pay the royalties required, they dont get to dig the minerals out of the ground.
Although if Karzai did try such a move, the US may just repeat what happened when the US and British governments overthrew the government of Iranian president Mohammad Mosaddegh just because Mosaddegh had the balls to kick out the British AIOC oil company (who later became British Petroleum) and take over the oil for themselves.
Re:That's Great But... (Score:5, Informative)
A republic is referred to as a "representative democracy" but those are weasel words
No those are orthogonal terms. The USA is both a representative democracy and a republic. The UK is a representative democracy but not a republic. The PRC is a republic but not a representative (or direct) democracy.
A republic is a state where power is not vested in a hereditary monarch. A democracy is a state where the ultimate power is vested in the people. A representative democracy is one where individual decisions are made by representatives of the people, as opposed to a direct democracy (see some ancient Greek city states and modern Switzerland) where decisions are made directly by the people.
Re:That's Great But... (Score:2, Informative)
As of June 1, 2010, the Total Public Debt Outstanding was approximately 88.9% of GDP, and for the first time exceeded $13 trillion.
Learn something new. [wikipedia.org] The GDP of the US is $14.256 Trillion, our debt currently is approaching that. That is not a per year deficit, but the total debt.
Re:Handy (Score:2, Informative)
That article doesn't contradict what I said: "most of the oil from the Middle East goes to Europe, Japan, and Asia".
Go back to school, Japan is in Asia.
You see, despite the holier-than-thou attitude of Europeans, the West is in this together: Western economies need each other and they need oil (and despite bogus per-capita calculations, European economies use energy at about the same rate as the US economy). A threat to European oil supplies is a threat to the US economy.
Currently, indeed, 50% of the Iraqi oil exports go to the US, and US (and UK) companies profit handsomely from it. Given how expensive the Iraq war was, I have no problem with that, and I hope it will continue until the US has been significantly compensated for the expenses of this war.
I think Americans would be overjoyed if Europe would take care of its own backyard. Until that happens, this is the way it has to go down.
Either you didn't read the article, or you totally missed the point:
"The four giant firms located in the US and the UK have been keen to get back into Iraq, from which they were excluded with the nationalization of 1972. During the final years of the Saddam era, they envied companies from France, Russia, China, and elsewhere, who had obtained major contracts. But UN sanctions (kept in place by the US and the UK) kept those contracts inoperable. Since the invasion and occupation of Iraq in 2003, much has changed. In the new setting, with Washington running the show, "friendly" companies expect to gain most of the lucrative oil deals that will be worth hundreds of billions of dollars in profits in the coming decades."
Re:That's Great But... (Score:3, Informative)
Best I can tell the people actually doing the nation building in afghanistan are the Chinese.
http://www.larouchepac.com/node/14136 [larouchepac.com]
So this is coverage of a December new york times artice and the LPAC article was in April, kind of late. Doing a search on larouchepac.com on china and afghanistan give a number of hits this year. Now the way things work, everyone important has known about the mineral deposits for a while. So, if you feel like saying something interesting, try speculating on how this might be driving a lot of recent moves in the area.
Don't like LaRouche? In this case, you might try to remember top spook types in the 80's characterized his organization as "the best private intelligence organization in the world". Ah well. I am sure MSM meets all your information needs. Anyway, the recession is over and Obama is doing a wonderful job, for someone.
Re:That's Great But... (Score:3, Informative)
National debt stands at almost 90% of GDP.
I don't think you know what the difference between a debt and deficit is. A debt is caused by a deficit. There's a deficit that's 90% of the country's GDP. That means that the government spends our GDP plus 90% of it again, on shit.
Um, you have debt and deficit confused. It is the US gross debt that is getting close to 90% of GDP, not the annual deficit which is projected to be a "mere" trillion-plus for 2010.
Re:I get real tired of this (Score:3, Informative)
Another "The US doesn't manufacture anything," post. That's not just wrong, it is the opposite of right. Not only does the US still manufacture products, it is still the #1 producer of manufactured goods in the entire world. That's right, more than any other nation. There's all kinds of things out there the US produces, heavy machinery, computer processors, advanced materials, etc, etc.
Now China is on track to become the #1 producer in about 2020 is they keep growing like they are. However none of that changes the fact that the US is a massive production powerhouse.