Afghan Rail Plan To Boost Mineral Exports

Courtesy of The Financial Times, a report on the Asian Development Bank’s interest in raising $1bn to expand a newly-completed stretch of railway in Afghanistan into a countrywide network to export iron ore and copper to global markets.  As the article notes:

“…Afghanistan is due to open the 75-km link between the northern city of Mazar-e-Sharif and the Uzbek border on Wednesday as a first step towards building routes to ferry freight and passengers between Kabul and other main cities.

Railways will be crucial to realising the Afghan government’s dream of exploiting huge untapped mineral resources to shore up the economy as allies scale back support ahead of a security handover in 2014.

But with many donors facing economic crises at home, and fears lingering that Afghanistan may once again collapse into civil war, it may be many years before plans to lay track through mountains, plains and desert are realised.

“What we hope will happen is that we will have a network around the whole country, but we’ve got to do these things in stages, especially since we need to find the money,” said Juan Miranda, head of the ADB’s Central and West Asia Department.

Locomotives had conducted test runs on the new line but would haul their first commercial cargo on Wednesday in the form of a wheat shipment belonging to the World Food Programme, the UN relief agency, said an ADB official in Kabul.

Soviet invaders built a small stretch of track during the 1980s, but the project represents the most ambitious rail scheme undertaken in Afghanistan.

Mr Miranda said the the UK and Japan had provided start-up money for a new Afghan infrastructure fund to finance transport projects, adding that he would be seeking to attract more contributors next year. The ADB was also pushing ahead with plans to complete a final, north-western stretch of a ring road linking big cities around Afghanistan within the next four years, he said.

Aid and military contracts have driven rapid economic growth in Afghanistan in the past decade, raising the risk that the withdrawal of most Nato forces will trigger a sharp slow-down that could undermine the fragile state.

The ADB’s transport projects seem to complement the Obama administration’s hopes of putting Afghanistan’s economy on a more sustainable footing by promoting its role as a trade hub reminiscent of the “Silk Road” of antiquity. But talk of a new Silk Road has been greeted with scepticism by experts who say the enormous economic and political barriers to greater regional trade mean the concept may have more appeal as a rhetorical device than as a realistic proposal.

Afghanistan’s hopes of developing mining – which currently accounts for less than 0.3 per cent of gross domestic product – received a boost last month when the state-owned Steel Authority of India won a bid to start developing Hajigak, a giant iron ore deposit in the centre of the country.

A Chinese consortium has started work at the Aynak copper deposit west of Kabul after winning a tender in 2008, though progress has been limited.

The lack of rail to export ore is just one of a gamut of obstacles to large-scale mining ranging from the security risks posed by insurgents to the enormous logistical challenges of working in land-locked Afghanistan’s hostile terrain.

Although the new stretch of railway may be a modest first step compared with some of the grander visions for Afghanistan, it could spur trade in the north, where security is better than in the south and east. The line starts at a dry port at Hairatan on the Uzbek border, which accounts for a large proportion of Afghan imports.

Plans are on the drawing board to extend the line to the western city of Herat, near the border with Iran, and to the central town of Bamiyan, close to the Hajigak iron ore deposit, before reaching Kabul and the eastern city of Jalalabad, near Pakistan.

This entry was posted on Tuesday, December 20th, 2011 at 9:22 am and is filed under Afghanistan.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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