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Report: U.S. Invests $488 Million In Unprofitable Afghan Mines

| by Diana Kruzman
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A report released by the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR) in January indicated that U.S. mining projects in Afghanistan were in danger of failing. According to the report, the U.S. spent $488 million to grow Afghanistan’s oil, gas and mineral industries, valued at $1 trillion by some estimates, but has seen “limited progress” in many projects and abject failure in others.

The largest part of the initiative, which aimed to extract Afghanistan’s valuable iron, copper, lithium, natural gas and petroleum reserves and get them onto the commercial market, was led by the Pentagon Task Force for Business Stability Operations, which invested $215 million on 11 extractive programs over the past five years, Foreign Policy reports. Of those, only three technically met objectives, and none of the 11 projects could be considered complete after the Pentagon shut down the task force last year, according to Vice News. Even one of the three projects which met the objectives -- a $43 million gas station -- ended up generating no revenue once it was created, ProPublica notes.

USAID and the Defense Department have also funded projects in the country, with the goal of helping wean Afghanistan off of foreign aid by growing its economy and taking advantage of its natural resources. However, many of the projects were hampered by widespread corruption, structural problems and a lack of infrastructure.

 The U.S. has also come under fire for its failure to assess the ability of Afghans to sustain the project; in one instance, after international aid was withdrawn from the Afghan office overseeing the country’s mining industries, the office fired two thirds of its staff. Other accusations of wasteful spending, punishing a whistleblower, and overall lack of accountability were included in the report as well.

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The Defense Department did not comment on the findings released in the report. According to USAID, the projects helped Afghanistan “enact investor-friendly extractive legislation, improve the ability to market, negotiate and regulate contracts, and generate geological data to identify areas of interest to attract investors.”

The Senate will hold a hearing on the Pentagon task force and its projects in Afghanistan during the week of Jan. 18.

Sources: ProPublica, Foreign Policy, SIGAR, Vice News / Photo Credit: U.S. Geological Survey, Foreign Policy