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War has torn the sleepy mountain nation of Afghanistan for the past three decades. Now, however, its fortune may change, thanks to the discovery of a mineral deposit wth over $1T USD worth of lithium and other mineral deposits.  (Source: Tyler Hicks/The New York Times)

Lithium is commonly used in batteries (electric vehicles, electronics) and pharmaceuticals.  (Source: About.com)

A map of Afghanistan's resouces, along with their value.  (Source: The New York Times)
Military deployment and close political ties may give U.S. ideal opportunity to harvest valuable resource

Lithium deposits worldwide may be sufficient to eventually sustain the demands of an electric-vehicle driven world and modern electronics, but in the near-term, demand-driven shortages loom.  Fortunately, the U.S. has made a pivotal discovery that may help to keep costs in the U.S. down.

According to a report in 
The New York Times, senior American government officials are quoted as saying that a massive mineral deposit has been discovered in Afghanistan which holds $1T USD in lithium, iron, copper, cobalt, and gold deposits. 

The lithium deposits are expected to exceed those of Bolivia, the world's largest current producer of lithium.  Bolivia contains over 9 million tons of extractable lithium, according to recent estimates.  Lithium prices currently are at around $6,700 USD per ton and have doubled over the last few years.  That places the net value of the lithium deposits alone at around $60B-$100B USD.  An internal Pentagon memo states that Afghanistan may become the "Saudi Arabia of lithium."

The iron deposits are estimated to be worth $420.9B USD and the copper deposits are estimated to be worth $274B USD.  A full breakdown (with the notable absence of lithium) is available here.

The U.S. currently occupies Afghanistan, and this spring U.S. President Barack Obama started the deployment of 30,000 extra troops to the region.  The U.S. troops are safeguarding the fledgling Afghani government from the Taliban, a Sunni Islamist insurgency movement that would prefer to see the country returned to a non-democratic religious rule.

That close relationship may allows the U.S. to harvest the resources quite affordably.  And it should allow U.S. corporations to easily enter the country and pursue development of the resources.

U.S. officials recently briefed Afghanistan's President Hamid Karzai and the Afghan government on the discovery.  Gen. David H. Petraeus, commander of the United States Central Command, in a Saturday interview stated, "There is stunning potential here.  There are a lot of ifs, of course, but I think potentially it is hugely significant."

The discovery could provide for a great boost to Afghanistan's standard of living.  Currently, the entire nation only makes $12B USD a year, a figure largely derived from Opium drug trafficking and foreign aid.

However, threats to the U.S. and Afghanistan harvesting the deposit remain.  Paul A. Brinkley, deputy undersecretary of defense for business and leader of the Pentagon team, says that while Afghanistan has a national mineral mining law, this law has never received a serious challenge before.  He states, "No one has tested that law; no one knows how it will stand up in a fight between the central government and the provinces."

Also, he's worried about possible environmental impact of the mining, stating, "The big question is, can this be developed in a responsible way, in a way that is environmentally and socially responsible?  No one knows how this will work."

Afghanistan has little current mining capacity.  States Jack Medlin, a geologist in theUnited States Geological Survey’s international affairs program, "This is a country that has no mining culture.  They’ve had some small artisanal mines, but now there could be some very, very large mines that will require more than just a gold pan."

Even if the U.S. can handle environmental and legal concerns, there's the issue of the Taliban trying to take the deposits by force.  And there's the problem of growing tensions between the U.S. government and Karzai, following suggestions by U.S. officials that Karzai may have committed election fraud in his most recent election.

Regardless, the deposits appear valuable enough that it's likely that the U.S. and Afghani governments will be compelled to cooperate to begin their extraction.

Interest in possible mineral deposits was triggered by 1980s era Soviet charts which suggested mineral deposits in Afghanistan's mountainous terrain.  The U.S. Geological Survey investigated the region, first using advanced gravity and magnetic measuring equipment attached to an old Navy Orion P-3 aircraft and then with a using an old British bomber equipped with instruments that offered a three-dimensional profile of mineral deposits below the earth’s surface.

Most of the deposits are located in central and northern Afghanistan.  The main lithium deposit is located in Afghanistan's central Ghazni Province.  Many other deposits look to hold rare earth metals, which are at present largely controlled by China.  There also appears to be large deposits of niobium, a rare, soft, grey, ductile transition metal used in superconductors.



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This article is over a month old, voting and posting comments is disabled

By YashBudini on 6/14/2010 10:59:22 PM , Rating: 2
It's not a question that this will be a double edged sword, it's only a question of the degree of underestimation as to how sharp the blade will be.


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