Mining is a small but growing industry in Afghanistan. Key minerals include iron ore, copper, gold, rare earth metals and lithium. There is potential for major expansion given the country’s untapped reserves, but the sector faces problems with lack of infrastructure, technology and investment. The state-owned companies dominate mining currently. With improved policy frameworks to facilitate foreign investment, better transport links and modernized mining techniques, the industry can drive substantial economic growth.
Major gaps exist in terms of regulatory policies, adequate electricity/water access to mining sites, infrastructure to transport outputs, latest technology deployment and access to skilled labor. Large scale investments are required to realize the potential of mining to transform into an engine for GDP growth. Privatization of state owned firms, public-private partnerships in infrastructure development and government incentives for new exploration can help scale the sector.
Afghanistan’s this industry is poised for significant expansion to drive sustainable economic development. Home to over $1 trillion in untapped mineral reserves including iron, copper, lithium and rare earth metals, mining can emerge as a major revenue generator. However, the sector currently contributes less than 3% to GDP due to infrastructure, technology and investment gaps.
The state-owned enterprises dominate but lack scale and modernization. Private sector participation is limited due to unclear regulatory frameworks, security issues and high costs. Large capital investments are needed to develop new mines, upgrade existing ones, build transportation and power infrastructure at mining sites.
Consulting firms like RFC can support the companies and government agencies through a range of advisory services spanning strategic planning, industry analysis, benchmarking, feasibility studies, policy framework design, operational enhancement and change management. Our expertise in end-to-end mining project development, ESG frameworks, global best practices in sustainable mining, and linkages with technology providers, can assist stakeholders in overcoming barriers and taking the industry to the next level.
