Afghanistan Mineral Riches Won’t Go Anywhere Without Rail

Afghanistan Mineral Riches Won’t Go Anywhere Without Rail :Supervisor Atta Mohammad watches the cranes swivel and workers at the Naibabad freight terminal rush to unload wheat and construction material from Uzbekistan that’s just arrived on Afghanistan’s only railroad.

The cargo has to be transferred to trucks to reach the rest of the country through the icy passes in the Hindu Kush mountains that loom over the featureless desert because the 75-kilometer (47-mile) railway ends a short distance from the terminal near the northern town of Mazar-e-Sharif.

The short stretch of track is intended to be the start of 3,600 kilometers of rail that will be the key to unlock Afghanistan’s mineral riches, including iron, copper and gold. In 2010, the Pentagon estimated that Afghan minerals charted by the U.S. Geological Survey were worth some $1 trillion. In 2011, the Afghan government put the estimate at $3 trillion.

“Actually it’s $30 trillion — the U.S. knocked a zero off to keep our assets a secret,” Afghan President Hamid Karzai told Indian investors in December. He offered no support for his estimate, and investment in Afghan mining so far has been led by groups from China and India, not the U.S.

All the projections of Afghan riches suffer from the same weakness. They all assume that the minerals can be mined, transported and exported from a country ravaged by decades of warfare and facing growing uncertainty as the U.S. and its allies prepare to withdraw their combat forces by the end of this year.

Finding Money

Afghanistan’s 25-year plan envisions rail connecting the country with existing lines beyond its borders, Ahmad Shah Wahid, Afghanistan’s deputy minister for public works, said in an interview in his Kabul office. The routes would connect to the north with lines running across Central Asia from China to Europe, to the east and south to Pakistan, and to the west to Iran.

The biggest impediment is finding the billions of dollars needed to build such a national rail network.

“Railways are absolutely vital” to carry landlocked Afghanistan’s mineral riches “to the neighboring countries that have access to ports” to reach world markets, said Joji Tokeshi, country director in Kabul for the Asian Development Bank, which provided a $165 million grant that covered 97 percent of the cost of building the short railway from Uzbekistan to Mazar-e-Sharif.

“But it’ll take a huge investment that cannot be done by the government alone or donors alone,” he said.

Even if the money can be raised, trains, tracks and trestles would be vulnerable to sabotage by the Taliban and other militants armed with improvised explosive devices, mortars, rocket-propelled grenades and other weapons as Afghan forces take over from the U.S. and allies.
Trackside Police

“There are a lot of challenges they need to overcome, both in terms of security in building it and in maintaining the rail line,” said U.S. Army Major Timothy Christensen, director of a rail advisory team that’s assisting the Afghans.

The Afghan government, Christensen said, has stationed 470 police officers to protect the track that passes the Naibabad freight terminal, which is about 0.02 percent the length of the proposed national rail network.

The American team has recommended that villages along rail routes be given a stake in their safety by developing projects that benefit the communities, Christensen said in a phone interview from Kabul. Security “is a challenge, but it’s not insurmountable, and you try to mitigate it the best you can.”
Indian Investors

So far, the Afghan government’s strategy has been to require companies that win mine-extraction bids to build railroads connecting their mines with networks in neighboring Iran and Pakistan.

An $11 billion iron ore project in Hajigak, in Bamiyan province 100 kilometers west of Kabul, has been delayed by a group led by Steel Authority of India Ltd., a company controlled by India’s government, in part because of differences over who should pay for a railroad.

The original plan envisaged an 800-megawatt power plant, power transmission lines and a 900-kilometer rail line from Hajigak to Zahedan, Iran, to carry the ore to the Iranian port of Chabahar on the Persian Gulf, about 690 kilometers south.

Although the Indian group remains committed to the mining project, “we expect the Afghan government to provide us some basic facilities, such the rail network connecting the mine to the port,” C.S. Verma, chairman of the New Delhi-based Steel Authority, said in an e-mail. “We plan to go in a phased manner and make the investments over a period of 10-12 years.

Afghanistan Mineral Riches Won’t Go Anywhere Without Rail

Source : www.businessweek.com

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