Afghanistan, officially Islamic Republic of Afghanistan is a landlocked country in Asia. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs. However, The mining sector in Afghanistan has the potential to generate major government revenue for the country and is recognised as a valuable source of revenue to develop the national economy.
The international community also remains committed to Afghanistan's development, pledging over $83 billion at ten donors' conferences between 2003 and 2016. In October 2016, the donors at the Brussels conference pledged an additional $3.8 billion in development aid annually from 2017 to 2020. Even with this help, Government of Afghanistan still faces number of challenges, including low revenue collection, anemic job creation, high levels of corruption, weak government capacity, and poor public infrastructure.
- About Afghanistan
- Laws & Regulations
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Afghanistan’s rugged terrain and seasonally harsh climate have presented a challenge to habitants and conquering armies for centuries. Afghanistan extends from the imposing Pamir Mountains in the northeast Wakhan Corridor, through branches of smaller mountain ranges, down to the southwestern plateau where the fertile regions of Kandahar merge with the deserts of Farah and Seistan. More than 49 percent of the total land area lies above 2,000 meters. There are a number of smaller mountain ranges spanning Afghanistan but the largest mountains are found in the north-eastern section of the 600 km Hindu Kush mountain range. Afghanistan is completely landlocked, bordered by Iran to the west (925 kilometers), by the Central Asian States of Turkmenistan, Uzbekistan, and Tajikistan to the north and northeast (2,380 kilometers), by China at the easternmost top of the Wakhan Corridor (96 kilometers), and by Pakistan to the east and south (2,432 kilometers). For the most part, Afghanistan may be described as semi-arid but regional variations and climate contrasts according to levels of elevation. Annual rainfall is low, but the high mountains contain sources for many streams and rivers which supply water for cultivation. The executive branch of the Afghan National Unity Government consists of a powerful and popularly elected President, two Vice Presidents and a Chief Executive Office. A National Assembly consisting of two Houses, the House of People (Wolesi Jirga) with 249 seats, and the House of Elders (Meshrano Jirga) wiyh 102 seats forms the Legislative Branch. There is an independent Judiciary branch consisting of the Supreme Court (Stera Mahkama), High Courts and Appeal Courts. The President appoints the nine members of the Supreme Court with the approval of the Wolesi Jirga. President Hamid Karzai became the first democratically elected President of Afghanistan on December 7, 2004. Previously, Hamid Karzai had been Chairman of the Transitional Administration and Interim President from 2002.
Laws and Regulations
Afghanistan’s extractive industry is governed by the 2014 Mineral Law and the Hydrocarbons Law of 2009.
According to the 2013 EITI Report, the 2014 Mineral Law was designed to improve the governance of the sector and improve the confidence of potential investors. In particular it remedied a previous situation where exploration licenses could not be turned to production licenses. The law prohibits elected politicians and senior government officials from acquiring mining contracts. As the report also notes, “perceived deficiencies in the law have been noted including the absence of transparency in the bidding process and allocation of licenses, of the requirement that contracts be published in full, and of clear penalties for violations of the law.”
The Hydrocarbons Law of 2009 was written specifically to encourage private investment in the sector. It states that contracts must be awarded subject to the completion of a public, transparent and competitive tender process managed by the Ministry of Mines and Petroleum. In the event of a tie between two bidding companies, the law favours the bidder with an Afghan partner.
The 2013 EITI Report is a good source of information on these issues, including state participation in the extractive sector and artisanal and small-scale mining.
The Ministry of Finance is the sole public authority with jurisdiction to collect taxes and custom duties and the Ministry of Mines and Petroleum is the authority with jurisdiction to collect Mineral Royalties. Royalty rates are not specified.
All contracts should by law be published and be made available online, however EITI Reports show that there are important deficiencies in record keeping.
Mining regulations stipulate that announcements of bidding be published on the Ministry of Mines’ website, national and international press and media in Dari, Pashto and English, by the Department of Cadaster. The announcement is also to be provided to local government authorities by letter.
The regulations require that no later than ten days following the execution of any mining contract, the Ministry of Mines and Petroleum (MoMP) is to publish an announcement summarising the material terms of the contract, including a summary of the minimum working obligations, rate of royalties and other material revenues and benefits that the government will derive from the contract.
The 2013 EITI Report highlights a number of areas where further work to improve the cadastre is needed. The World Bank is assisting the MoMP and the National Environmental Protection Agency in this work. More information, including recommendations for further work, is available in the EITI Report. ( Source EITI 2018)
No information has been provided.