Afghanistan's government released on Sunday the details of scores of mining and energy contracts, including a major Chinese deal, in an effort to counter rampant corruption and bribery of officials worrying resource investors and donors alike.
As the government finalises new laws designed to attract more foreign mining investment, officials made public 210 previously awarded contracts, including one signed in 2011 with China National Petroleum Corp to develop three oil and gas blocks in the Amu Darya basin.
"For the first time in the history of the country, we have been able to publish the details of the awarded contracts on the website of the ministry of mines," Mines Minister Wahidullah Shahrani told reporters in Kabul.
Shahrani told Reuters in an interview last month that contracts would be published on the mining ministry's website, as well as newspapers, to safeguard delivery of $16 billion in aid promised by foreign donors over four years and tied to stronger anti-graft measures. Chinese and Indian companies are already scrambling to access to Afghanistan's estimated $1 trillion worth of untapped mineral wealth. The country has large deposits of gold, copper, iron ore and oil, as well as lithium and rare earths used in high-tech manufacturing.
Chinese firms are leading the race, with China Metallurgical Group (MCC) and Jiangxi Copper winning a 2007 deal to exploit the giant $3 billion Aynak copper mine south-east of the capital Kabul. The Amu Darya contract, covering an estimated 80 million barrels of oil, revealed that CNPC would allocate the first 15 percent of extracted hydrocarbons in any month to the government as royalties, and pay income tax of 30 percent.
The company would also be required to use Afghan labour and materials where possible, although CNPC could be free to import hundreds of Chinese or other foreign workers given the difficulty of finding skilled labour in Afghanistan. "The contractor undertakes to give priority to Afghan nationals with equivalent qualifications and experience, and actively search for Afghan nationals in order to meet the training and employment obligations," the contract said. In making the contracts public, the government risks more public opposition to mining projects at a time when it is relying of resource income to replace diminishing development aid now accounting for 90 percent of the national budget.
Shahrani's ministry will soon resubmit to President Hamid Karzai's cabinet mining laws that Afghan officials and Western donors hope will persuade foreign firms to invest in the country's resources, but which were rejected in July over concerns they were too generous to miners.