Afghan Copper Potential Lures Investors Worldwide

By Shihoko Goto — Exclusive to Copper Investing News

Afghan Copper Potential Lures Investors Worldwide

US  interest in Afghanistan is not simply about fighting a war against terrorism. It is also  increasingly about ensuring a steady supply of metals. The battle for the country's natural resources may, however, be much less straightforward than was once anticipated.

While crude oil may have been a key factor in toppling Saddam Hussein's regime in Iraq, in 2001 few would have argued that global interest in ensuring a stable and democratic government in Kabul was to secure a steady stream of copper, gold, uranium, and other resources. Since then, however, international attention over Afghanistan's mineral wealth has intensified steadily, and there are high hopes that its resource potential will not only result in profits for the post-conflict nation, but also for private companies that have risked heavy investment in the country from the earliest stages.

The stakes are high. Last September, the US Geological Survey found significant copper and  cobalt deposits near Kabul, and copper and gold deposits in Southeast Afghanistan.

"The mineral resources in Afghanistan have the potential to completely transform the nation's economy," stated Regina Dubey, Acting Director of the US Department of Defense's Task Force for Business & Stability Operations. "This important new work by the USGS will be a powerful tool for those attempting to accurately evaluate potential investments in Afghanistan." The survey estimates that Afghanistan's known natural resources are around $1 trillion, but Afghan officials believe that the potential could be at least three times that figure.

Hopes are undoubtedly high that Afghanistan's mineral deposits will boost the nation's coffers. Marcia McNutt, the US Geological Survey's Director, stated that "there is always increased risk for commercial ventures investing in new mining facilities in frontier areas such as Afghanistan, but by making information on the locations and estimated quantities and grades of ores publicly available, we lower that risk, spurring progress."