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 into 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 customs 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)