BREAKING NEWS

Afghan government approves gold mine deal

By ASSOCIATED PRESS

DECEMBER 13, 2010 23:55

KABUL, Afghanistan — Despite the crackle of gunfire in the mountains of northern Afghanistan, the wealth of gold beneath will be mined under a multimillion-dollar contract that government officials approved on Monday.

The deal is the first mining project in Afghanistan backed by private investors in the West. Afghan and US officials hope many more deals will follow to help jump-start the economy of this impoverished nation in its 10 year of war.

"This project is an important step forward for Afghanistan's economic sovereignty," U.S. deputy undersecretary of defense Paul A. Brinkley said in a statement on Monday. "It represents a turning point in the history of international investment into Afghanistan."

About 10 investors — most of them from the United States and Britain — are investing an estimated $50 million in the gold project in Dushi district of Baghlan province, about 84 miles (135 kilometers) northwest of Kabul, according to Wahidullah Shahrani, Afghanistan's minister of mines. The only other gold mine in Afghanistan is in neighboring Takhar province.

Shahrani said he hoped that getting the deal approved by the Inter-Ministerial Council, which comprises the government's top finance and economic officials, will send a strong signal to global mining companies that there are investment opportunities in Afghanistan, especially in the mining sector.

Geologists have known for decades about Afghanistan's vast deposits of iron, copper, cobalt, gold and other prized minerals. In June, the U.S. Defense Department put a startling $1 trillion price tag on the reserves, but Shahrani called that a conservative estimate. He said he's seen geological assessments and industry reports estimating the nation's mineral wealth at $3 trillion or more.

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