The benefits of Afghanistan’s mineral riches may not be so forthcoming

In late August, the Taliban interim government signed several contracts worth $6.5bn with foreign and national investors to develop some of Afghanistan’s mineral wealth. As the country grapples with a struggling economy and the legacy of decades of war and great power conflicts, these mining deals could provide much-needed revenue and employment opportunities.

But they also raise serious questions about the country’s sovereignty, natural resource integrity, environment, and cultural heritage preservation.

The deals appear to be a double-edged sword: Afghanistan could benefit spectacularly – or it could fall into the same trap other resource-rich developing nations have, to the detriment of its people.

The potential for economic development

In a country ravaged by years of conflict and instability, foreign direct investment (FDI) in sectors like mining presents itself as a lifeline. Afghanistan faces a high unemployment rate that leaves many of its citizens struggling to find stable work and make ends meet. In this context, foreign investment in mining could provide direct employment opportunities in the mines as well as jobs in ancillary sectors like transport, services, and manufacturing.

Beyond job creation, FDI brings with it the potential for technological transfer. By partnering with foreign companies experienced in advanced mining techniques, Afghanistan could benefit from a significant transfer of technology and skills, which, in turn, would raise the country’s technical capabilities and industrial know-how.

Afghanistan’s economy is heavily reliant on agriculture, making it vulnerable to climate change, market fluctuations, and external economic shocks. The influx of mining investments could contribute to much-needed economic diversification. By branching out into sectors other than agriculture, Afghanistan can mitigate its vulnerability to various risks and lay the foundation for a more robust economy.

The biggest hurdle remains the economic sanctions imposed by the West, which have had the unintended effect of entrenching the Taliban’s power base in the country. The sanctions have led to an increase in illicit activities and have had a ricochet effect of marginalising women from public spaces, schools, and workplaces.

FDI in mining and other sectors could counterbalance the negative impact of these sanctions by reintroducing lawful economic activities that can bring local prosperity and perhaps contribute to social reforms.

The challenges of resource exploitation

An injection of foreign capital, however, does not come without strings attached. Experience from other developing countries has shown that large-scale resource extraction often hands a disproportionate amount of power and influence to foreign corporations, sometimes at the expense of local communities and governance structures.

Such arrangements could potentially compromise Afghanistan’s self-determination and cast a shadow over its long-term wellbeing.

Additionally, the possibility of mining contracts being retained for speculative purposes remains. For example, some companies that have acquired mining privileges may choose to defer the actual extraction process, while waiting for an increase in commodity prices or more advantageous circumstances. If this scenario occurs, Afghanistan would have effectively relinquished authority over its natural resources without obtaining any immediate benefits, which would put its economic stability and autonomy in a more precarious position.

But even in optimal conditions, when investors act upon their commitments, the realisation of the full economic potential in large-scale mining projects requires many years due to a multitude of variables, including extensive geological tests, the construction of critical facilities, and the establishment of operational standards. In other words, the anticipated economic benefits may not be achieved in the short term.

Another challenge related to the mining deals is ensuring the equitable distribution of profits among Afghan citizens.

The acting minister of petroleum and mines, Shahabuddin Delawar said during the contract-signing ceremony last month that there is complete transparency in the mining contracts, highlighting the prevention of illegal mining activities and smuggling.

But the involvement of high-level Taliban officials in Afghanistan’s mining sector raises multiple concerns. Scepticism abounds whether the revenue generated from mining will benefit the broader population or be concentrated in the hands of a few.

Another uncertainty remains as to the actual commitment to responsible mining practices, particularly those that protect the environment. Afghanistan is a water-poor country, and mining activities can exacerbate this scarcity by diminishing and contaminating water resources. Such environmental degradation could have a devastating impact on local communities that rely on these resources for their livelihoods.

Additionally, labour exploitation could occur, because the mining sector could potentially be monopolised by high-ranking officials, who may overlook the welfare of the workers without proper regulations and oversight for fair wages and safe working conditions.

Since the precise terms of the mining agreements have not been disclosed,  whether cultural heritage preservation, Afghanistan’s most critical resource, was taken into account remains to be seen. Afghanistan is home to a rich tapestry of history and culture, much of which remains vulnerable to large-scale industrial projects.

One example is the Mes Aynak copper mining project, which has been a priority for development for both this and past governments. The site is located on what was once an ancient Buddhist city, from which some remarkable ruins remain. If extraction at the site takes place without careful adherence to archaeology protocols and an eye towards preserving the cultural heritage, this unique historical spot could be in danger of irreparable damage.

The issue at hand here is not whether Afghanistan should or should not engage in mining, but how it should navigate the complexities that accompany such a course. A more balanced approach is desperately needed – one that harmonises the imperatives of economic growth with cultural and natural resource preservation.

Policy frameworks must be put in place to ensure that the financial benefits are equitably distributed among the Afghan populace and that there are strict guidelines for environmental sustainability and labour rights protection. Simultaneously, there need to be actionable steps taken to protect the cultural heritage that gives the Afghan identity its texture and depth.

The stakes are high, and Afghanistan’s leaders must tread carefully to ensure that the pursuit of prosperity does not come at the expense of sovereignty, the environment, and the wellbeing of their people.

The views expressed in this article are the authors’ own and do not necessarily reflect Al Jazeera’s editorial stance.