Thursday, November 19, 2009

China, Copper and Corruption in Afghanistan

When the Afghan and Chinese government get together, you know something shady is probably going down. This morning, the Associated Press broke the news that Afghan Minister of Mines Muhammed Ibrahim Adel accepted $20 million in bribes from the Chinese government to award the lucrative Aynak Valley copper mining contract to China in 2007. The sources were American officials familiar with intelligence reports placing the transaction as going down in Dubai. The Chinese had beaten out fourteen international mining companies, including bids from the United States, Canada and India.

The China Metallurgical Group had spent $3 billion to acquire a 30-year lease to Aynak copper mines, which are said to hold 240 million tons of copper. The copper depository may be the second largest in the world, only to a mine in Peru that is also operated by the Chinese. The mines are said to hold over $40 billion worth of copper, with some projections as high as $88 billion. Nevertheless, the Afghan government was happy to sell low, even kickbacks aside. The mining is promising to create thousands of jobs for years to come, and we all know how great mining jobs are. China's notorious record of mineral development in Africa is a cause for concern, as a massive mining project will undoubtadly lead to environmental problems. The area is home to 90,000 people and Kabul's main water supply.

While corruption and environmental concerns are unlikely to hold up the project, security issues certainly could. Earlier this year, the U.S deployed 2,000 troops to protect a road into the Aynak Valley that China is paving. Afghanistan is also home a large supply of oil, natural gas, and assorted minerals, so this project could likely serve as a blueprint for future foreign investment, with the United States paying billions of dollars to protect the investment interests of China and Russia. At least in the good old imperialistic days, we would have been protecting our own Big Oil companies.

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