Using mineral resources sustainably
Title: Promoting Good Governance in the Extractive Sector in Afghanistan (Mining Governance)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Ministry of Mines and Petroleum (MoMP)
Overall term: 2013 to 2018
Iron ore, gold, lithium, coal, copper and rare earths: Afghanistan is rich in mineral resources. The vast reserves remain untapped, however, because of a weak economy, a security situation that remains tense, and the persistent backlog of reforms. The problem is compounded by the illegal extraction of specific minerals, which holds potential for conflict.
The Afghan Ministry of Mines has been assigned key regulatory and supervisory responsibilities in the extractive sector but it lacks the necessary tools. Specialist knowledge and adequate implementation structures are also in short supply. The Ministry is therefore barely in a position to ensure state control over the sector.
The standards adopted by the Extractive Industries Transparency Initiative (EITI), which Afghanistan joined in 2010, have yet to be fully implemented. The people in the provinces where the raw materials are extracted are rarely involved in the granting of licences, for example, or are ill-informed about the process. Laws are contradictory in part or insufficiently differentiated, thereby creating barriers to investment. Unsatisfactory reporting practices further compound the problem of lack of transparency.
Conditions for the transparent and effective management of the mining sector in Afghanistan have improved. EITI standards are being applied and more capital is being invested in the mining industry. Increased state revenue helps promote the development of the country.
The project focuses on strengthening the administrative structures of the Ministry of Mines and increasing its capacity for strategic governance through policy advice, support in legislative procedures and improvement of technical expertise. Mining oversight is improved first and foremost at provincial level. National and local dialogue with civil society, the private sector and government authorities through the Afghanistan EITI (AEITI) and support from the Ministry for public reporting promote transparency in the extractive sector. National and international networking in the sector also plays a part in this.
To date, the project has provided technical and administrative training for some 500 mine inspectors and administrators at MoMP. This figure includes 67 inspectors who received further training in subjects relevant to the field and related to engineering at universities and in mining companies in Turkey, Iran and South America. 10 trainers from the partner ministry were also prepared for the professional and educational aspects of their skills enhancement tasks. They now train around 50 inspectors from nine provinces in modern mining and mine supervision.
About 70 employees – a quarter of them women – from the middle and senior tiers of management at the Ministry of Mines attended further training courses and can now process applications for licences to extract raw materials more quickly and efficiently. Another 140 administrative employees will be trained in 2018. Approximately a dozen members of staff at the Ministry of Mines will also be sponsored to study for a bachelor's degree in law in Afghanistan and a further 20 will receive funding for a master's degree. They will be able to take on senior positions at the Ministry in the future.
With AEITI support, Afghanistan has taken the necessary steps to be able to publish the ownership structures of mining companies on a regular basis by 2020, in accordance with the EITI standard. AEITI now also reports regularly on revenues from the extractive sector, thereby encouraging public debate. Regional AEITI events supported by the project are also contributing to this dialogue, giving the people an opportunity to demand a voice and to call for reforms.
The advice on the revision of mining laws and regulations will break down investment barriers and therefore contribute to a more stable investment climate in the extractive sector, resulting in an increase in demand for exploration permits and mining licences, for example.