Mining 2021 Comparisons

Last Updated January 21, 2021

Contributed By RIAA Barker Gillette

Law and Practice

Authors



RIAA Barker Gillette (RIAABG) is an internationally recognised law firm, and one of the largest and most well-reputed international firms in the region. It maintains the highest standards of professional excellence, and is affiliated with the finest global law firms in more than 106 jurisdictions around the world through its membership of Lex Mundi. The firm established an office in Kabul in 2009, to better represent the interests of clients in Afghanistan and improve its access to information and translations of current laws, and to facilitate working with relevant government authorities. The strong team of dedicated, qualified and experienced lawyers provides a broad spectrum of legal services. Lawyers in the Kabul office are fluent in both official languages of Afghan laws (Pashto and Dari), as well as English. The firm is active in the areas of project finance, M&A, privatisation, power projects, oil and gas projects, infrastructure projects, banking and finance, intellectual property, non-profit and social sector development, employment and labour law matters, telecommunications, construction, mining, pharmaceuticals, regulatory affairs, customs, corporate registration, corporate restructuring, joint ventures, public-private partnerships, and taxation.

According to a recent geological survey, there are more than 1,400 mineral fields in Afghanistan, which contain deposits of copper, lithium, talc, marble, gold, uranium, barite, chromite, coal, iron ore, lead, natural gas, petroleum, precious and semi-precious stones, salt, sulphur and zinc. Gemstones found in various fields include high-quality emeralds, lapis lazuli, red garnets and rubies. The vast mineral wealth of Afghanistan is estimated to exceed USD3 trillion.

The promulgation of the Minerals Law (published in the Official Gazette No 1315, dated 13 October 2018) and the Mining Regulations (published in the Official Gazette No 1366, dated 25 January 2020) have enabled private sector investors to benefit from a clear set of legal provisions relating to each aspect of investment in the mining sector. The previous lacunas of uncertainty, such as those regarding the manner in which the various stages of the mining processes were to be dealt with by the regulator, have now been removed.

The legal system of Afghanistan is based on Civil Law. The Minerals Law is the principal legislation for the mining sector, and sets out provisions on the ownership of mineral deposits, the eligibility of obtaining mineral rights, types of mineral rights, the regulatory bodies for mineral activities, bidding processes, ensuring transparency and the elimination of corruption, investment protection, the rights and obligations of mineral right-holders in terms of health and safety, environmental and social or community development, and abiding by the standards of the Extractive Industries Transparency Initiative (EITI) in the mining sector.

Other sources of mining legislation in Afghanistan include the following:

  • the Mining Regulation, published in the Official Gazette No 1366, dated 25 January 2020;
  • the Private Investment Law, published in the Official Gazette No 869, dated 21 December 2005, as amended in 2016;
  • the Hydrocarbons Law, published in the Official Gazette No 1277, dated 11 December 2017;
  • the Income Tax Law, published in the Official Gazette No 976, dated 18 March 2009, as amended in 2012 and 2015;
  • the Environment Law, published in the Official Gazette No 912, dated 25 January 2007;
  • the Regulation on Evaluation of Environmental and Social Impacts, published in the Official Gazette No 1276, dated 9 December 2017;
  • the Hydrocarbon Regulation, published in the Official Gazette No 1391, dated 11 November 2020;
  • the Law on Expropriation, published in the Official Gazette No 1258, dated 10 May 2017, as amended in 2018; and
  • the Law on Managing Land Affairs, published in the Official Gazette No 1254, dated 15 April 2017, as amended in 2018.

Natural resources are owned by the state in Afghanistan, including mineral deposits, even if they are located on private property. However, minerals extracted in compliance with the conditions of a licence are considered the property of the licence-holder. Article 9 of the Constitution of the Islamic Republic of Afghanistan, 2004 (the Constitution) provides that “mines and other subterranean resources, as well as historical relics, shall be the property of the State. The State shall administer, control and regulate Mineral resources and Mineral Activities”. However, Article 15 (2) of the Minerals Law provides that “all Minerals extracted under a licence in accordance with the conditions of the Licence (in any form of Product) are the property of the Licence-Holder.”

The principal role of the state is to promote the efficient development of the mineral industry by the private sector by being a grantor-regulator in the mining sector. The state grants licences to investors and companies to extract minerals in Afghanistan. The state issues licences that allow all mineral activities in the country to be conducted in accordance with the provisions of the relevant Afghan laws and regulations.

The Minerals Law ascribes various roles in different decision-making processes to the Ministry of Mines and Petroleum (MoMP), the Mining Technical Committee, the High Economic Council, the National Procurement Commission, the National Procurement Authority and the Cabinet of the Islamic Republic of Afghanistan.

The MoMP is responsible for the administration and implementation of the Minerals Law. Unextracted minerals are owned by the state, but when extracted under a licence the minerals become the property of the licence-holder who must, however, pay royalties to the state.

In Afghanistan, there are no mandatory national or government joint ventures contracting or participating in the mining sector, as the government of Afghanistan encourages private investment in the sector. Foreign natural and legal persons are not eligible to hold a small-scale mining licence; legal persons, however, can hold a large-scale mining licence.

The role of each relevant authority is as follows.

Ministry of Mines and Petroleum (MoMP)

The MoMP is the central organ of the state administration responsible for regulating the mining sector, geological surveys and similar matters that are deemed necessary by the authorised state organs, such as enhancement of the level of production and improvement of the quality of products.

The functions of the MOMP include the following:

  • the development of geological resources;
  • regulating mines surveys;
  • the preservation and protection of subterranean natural resources;
  • utilising natural resources in light of economic benefits;
  • setting the prices of products of the MOMP and its associated enterprises;
  • providing guidance on and assuming control of the sale and marketing of products of enterprises of the MOMP;
  • the development and strengthening of relations with foreign and local business entities;
  • issuing licences and administering mining contracts;
  • conducting tender processes;
  • obtaining performance bonds from contractors;
  • approving or cancelling large- or small-scale mining areas and prohibited areas; and
  • promoting effective use of raw materials and mines/hydrocarbons.

The MoMP is also responsible for co-operating with the Mining Technical Committee.

The Mining Technical Committee (MTC)

The MTC is an independent committee and is regulated under the Minerals Law. The MTC comprises the Deputy Minister responsible for the Geological Survey and the Deputy Minister of Technical Affairs, and five other appointed members, who are required to have specific skills and experience in the mining, finance and legal sectors.

The obligations and responsibilities of the MTC include, but are not limited to, the following:

  • providing technical input to the decisions made under the Minerals Law;
  • making recommendations in respect of a declaration or cancellation of large- or small-scale mining areas and prohibited areas;
  • evaluating applications for small-scale mining licences;
  • evaluating feasibility studies and mining proposals and issuing mine reports;
  • making recommendations in respect of variations to exploration programmes, mining proposals or small-scale work programmes;
  • making recommendations in respect of export policies and the use of existing infrastructure;
  • the suspension and revocation of exploration licences and exploitation licences;
  • evaluating tender proposals; and
  • issuing evaluation reports.

The High Economic Council (HEC)

The HEC is involved in different decision-making under the Minerals Law. It approves procedures for the conduct of meetings of the Mining Technical Committee, endorses restricted minerals programmes and endorses or rejects the declaration or cancellation of large- and small-scale mining areas and prohibited areas. It provides approval to the MoMP to negotiate mining concessions to replace transitional licences, and approves or rejects mining proposals and determines any conditions relating to the mining proposal. The HEC also recommends the grant or refusal of small-scale mining licences, and approves or refuses variations to exploration programmes, mining proposals or small-scale work programmes. Furthermore, the HEC approves guidelines, approves or rejects the award of Mining Concessions or terminates bidding processes, approves export policies, approves model forms of Mining Concessions, approves the suspension and revocation of exploration licences and exploitation licences, and approves the compulsory acquisition of land. HEC approval is also required to declare an area of land as either open or closed for mining activities.

The HEC is headed by the President and the Chief Executive of Afghanistan. Other members include the Second Vice President, the Minister of Finance, the Minister of Economy, the Minister of Foreign Affairs, the National Security Adviser, the Minister of Industries and Commerce, the Minister of Mines and Petroleum, the Minister of Public Works, the Minister of Agriculture, Irrigation and Livestock, the Senior Advisers to the President, the Governor of Da Afghanistan Bank, and the Minister of Urban Development and Land.

National Procurement Commission (NPC)

The NPC is established pursuant to Article 54 of the Procurement Law of Afghanistan. The sole responsibility and power of the NPC under the Minerals Law is to approve the award of the Mining Concession or terminate the bidding process. If the HEC approves the award of a mining contract, the NPC must determine whether to approve the award after considering the report of the National Procurement Authority (the NPA) and the terms of the mining contract, or to terminate the bidding process.

The NPC was established by the President of Afghanistan for the review and approval of the award of procurement contracts of monetary value beyond the powers of "award authority" and to determine the functions and authorities of "procuring entities". The President of Afghanistan is the head of the NPC and appoints its members; the President also makes any required changes to the composition of the NPC. In special circumstances, the NPC has the authority to take any appropriate decisions/resolutions in the greater interest of Afghanistan.

The National Procurement Authority (NPA)

The NPA was established pursuant to the Procurement Law. Its responsibilities under the Mineral Law are to monitor bidding processes, prepare audit reports, prepare guidelines and make recommendations to the MoMP in relation to practices and procedures for bidding processes.

The Islamic Republic of Afghanistan Cabinet

The Islamic Republic of Afghanistan Cabinet is responsible for determining the salaries of appointed members of the MTC, approving restricted minerals programmes, approving or rejecting the declaration or cancellation of large- and small-scale mining areas and prohibited areas, and endorsing or rejecting the award of mining concessions or terminating bidding processes.

The Cabinet is the highest executive and administrative body of the government. Decisions of the Council of Ministers are to be implemented by the citizens of Afghanistan and government officials and offices. The Cabinet consists of the President of the Islamic Republic of Afghanistan and the Ministers.

Mineral rights in Afghanistan have a constitutional basis and are also derived from other statutory laws. After the Constitution, the Minerals Law is the principal legislation for mineral rights.

Article 9 of the Afghanistan Constitution states that “Mines and other subterranean resources, as well as historical relics, shall be the property of the State.” Article 15 of the Minerals Law also provides that “all Minerals existing in their natural state are the property of the State.” Sub-article (2) of the same provides that “all Minerals extracted under a licence in accordance with the conditions of the Licence (in any form of Product) are the property of the Licence-Holder.”

Based on the above-mentioned articles, it is clear that mineral rights have the status of property. If minerals have not been extracted from the land, they are considered the property of the state. However, if they have been extracted by a licence-holder in accordance with the conditions of their licence, the extracted minerals are considered the property of the licence-holder.

As previously stated, the MoMP is the relevant authority for mining projects and has the executive power to issue all types of licences, while the HEC, on the recommendations of the MTC, is the granting authority for small-scale mining licences. For large-scale mining contracts, the Cabinet is the relevant granting authority, with confirmation from the NPC and the HEC. For large-scale mining licences, the HEC is the granting authority, with recommendation from the MTC. Accordingly, the granting authority in Afghanistan for a small-scale mining licence is the HEC, and for large-scale mining contracts is the Cabinet. The MoMP has provincial directorates in all provinces of Afghanistan and there is no overlapping of jurisdictions. The mineral rights are granted through a contract between the MoMP and a private company.

Security of tenure is guaranteed through the legal force of the contract between the licence-holder and the MoMP. The term of the contract with respect to length and renewal are reflected in the licence issued by the MoMP. An exploration licence is granted for three years and can be extended for another three years. A small-scale licence is granted for five years and can be renewed for a further five years. An exploitation licence is granted for a term of 30 years and can be renewed for an additional 15 years. The renewal or extension of the licence is subject to the approval of the MoMP.

Progressing from exploration to mining requires an exploitation licence, which is issued by the MoMP after confirmation by the HEC and the NPC and approval by the Cabinet (Article 28 of the Minerals Law). If the licence-holder fails to comply with the provisions of the contract or licence or the Minerals Law, in the first instance the licence-holder will be fined. If there is a second infraction, the licence will be suspended after approval by the HEC and with the recommendation of the MTC. If the suspension has not been resolved within one year, the licence will be cancelled. The cancellation of a licence must be approved by the HEC with the recommendation from the MTC.

Operating control and inspection of the mining projects is carried out by the MTC.

Environmental impact assessment is an important part of any natural resources project. Afghanistan has developed a clear impact framework, which is in line with the international standards. The environmental laws and regulations in Afghanistan include the following:

  • the Environmental Law, published in the Official Gazette No 912, dated 25 January 2007;
  • the Regulation on Evaluation of Environmental and Social Impacts, published in the Official Gazette No 1276, dated 9 December 2017;
  • the Regulation on Decrease and Prevention of Air Pollution, published in the Official Gazette No 991, dated 11 August 2009;
  • the Regulation on Controlling Materials Destructive to the Ozone Layer, published in the Official Gazette No 894, dated 6 August 2006;
  • the Regulation on Reduction & Prevention of Noise Pollution, published in the Official Gazette No 1210, dated 18 April 2016;
  • the Regulation on Bed and Surrounding of Water Resources and Water Infrastructures, published in the Official Gazette No 1187, dated 10 October 2015; and
  • the Law on Managing the Jungle Affairs, published in the Official Gazette No 1087, dated 10 September 2012.

Anyone who wants to undertake an exploration and/or mining project, plan, policy or activity must submit accurate requisite information to the National Environmental Protection Authority (NEPA) in order for it to determine the potential adverse effects and positive impacts of the project, plan, policy or activity. NEPA reviews the submitted information and may authorise the project, plan, policy or activity with or without conditions, provided that the potential adverse effects of the project, plan, policy or activity on the environment are unlikely to be significant. If the adverse effects are significant, NEPA may require the applicant to submit an Environmental Impact Statement or a Comprehensive Mitigation Plan.

A licence-holder is obliged to comply with the Environment Law and is required to avoid, minimise, mitigate and remediate impacts to the environment caused by the conduct of mineral exploration and extraction activities, and to rehabilitate the land where the mining activities have taken place.

A small-scale licence-holder must prepare and submit proposed environmental management plans. An environmental impact statement or a comprehensive mitigation plan is required under the Environment Law and the Environmental Management Plan, which must meet the requirements of these documents.

The exploration or exploitation licence-holders are required to submit the proposed environmental management plan and have the plan approved prior to commencing ground-disturbing works. Failure by a licence-holder to submit the environmental management plan may result in the rejection of the application for the licence.

NEPA has the authority to review proposed environmental management plans, and has to assess whether the plan will avoid, minimise, mitigate and remediate impacts to the environment caused by the mineral extraction activities as required by the Minerals Law. NEPA may decide to impose conditions on the proposed environmental management plan, or may require the licence-holder to amend it.

Environmental licences are issued on a national level by NEPA, which is a competent authority whose officials are very well-trained. As such, NEPA is an efficient and effective organ of the state, which regulates environmental laws and compliance therewith in Afghanistan.

The Environment Law establishes the following categories of protected areas:

  • strict natural reserves;
  • national parks;
  • natural monuments;
  • habitat/species management areas;
  • protected landscapes; and
  • managed resource protected areas.

NEPA develops a Management Plan for each protected area, which identifies activities permitted within the protected area and activities appropriate for the surrounding areas.

Pursuant to the provisions of the Expropriation Law, properties and land that contain historic and cultural heritage and national protection areas cannot be expropriated.

Furthermore, according to the Minerals Law, if a licence-holder discovers an archaeological or cultural relic or site in the course of conducting mineral extraction activities, he or she has to notify the MoMP and the Ministry of Culture and Information. The licence-holder shall cease conducting mineral activities in proximity to the archaeological or cultural relic or site until the MoMP grants approval for the recommencement of mineral activities, which may require compliance with additional conditions. The Ministry of Culture and Information is obliged to provide a report to the MoMP within three months regarding the archaeological or cultural relic or site and any additional conditions that must be complied with by the licence-holder.

Accordingly, the Environmental Laws only have an impact on exploration and mining in the protected areas and, in the case where a cultural relic is discovered at an operating mine, the operation of the mine can be postponed or halted based on the decision of the MoMP or the Ministry of Culture.

Community engagement and social impact assessment are common components of many mining projects. Afghanistan regulates all social impact projects through a Citizen Charter programme.

A licence-holder for any mining project must submit and obtain the approval of a Community Development Plan and a Local Content Plan from the MoMP prior to commencing ground-disturbing work, and must comply with any undertakings contained in or conditions imposed upon the approval of the plans. The MoMP is also required to appoint an ombudsman who shall invite and receive submissions from the local community in relation to any concerns in connection with the conduct of mineral mining activities. As a priority, the licence-holder must also hire local community personnel.

Furthermore, if a mining licence is granted for land that is owned or occupied by another person within 250 m of the licensed land, the licence-holder has to obtain the consent of the owner or occupier of the land prior to undertaking mineral-mining activities. The licence-holder must pay the owner or occupier compensation for any loss suffered due to mining activities. However, if the owner or occupier does not give consent to the project, the land can be expropriated pursuant to the provisions of the Law on Expropriation. If the land is not within 250 m of mining activities, the licence-holder is only obliged to consult with the owner or occupier in order to avoid or minimise any conflict between the mineral activities and the activities of the owner or occupier.

Any conflicts with the local community and/or landowners in close proximity to the land used by the licence-holder are resolved through consultation with the local authorities and the Valuation Committee established under the Law on Expropriation.

Prior and informed consultation with the local communities is mandatory and is carried out by the state. After the applicant submits the mining proposal, the MoMP is obliged to consult with the local community and to prepare a report summarising the consultation. Thereafter, the MTC is obliged to consider the consultation report prepared by the MoMP, and to evaluate the feasibility study and the mining proposal and assess commitments made in the documents with respect to the exploitation phase.

There are no specially protected communities such as indigenous people in Afghanistan. There are Sikh, Hindu and nomad communities who are considered to be indigenous people, but there are no provisions in Afghan law about specially protected communities. According to Article 6 of the Constitution of Afghanistan, the state is obliged to create a prosperous and progressive society based on social justice, the preservation of human dignity, the protection of human rights, the realisation of democracy and the attainment of national unity as well as equality between all people and tribes and balanced development of all areas of the country. However, upon the recommendation of the MTC, and with the confirmation of the HEC and the approval of the Cabinet, the MoMP may determine land to be either a large-scale mining area, a small-scale mining area or a prohibited area. If a land or parcel of land is considered to be of public interest, mineral activities on the land will be prohibited by the MoMP after considering factors such as national security, health and safety, environmental protection, the preservation of archaeological or cultural sites, the incompatibility of mineral activities with other land uses and any other factors prescribed in the regulations.

Community development agreements are mandatory in Afghanistan, which is why the licence-holder or applicant is required to submit a Community Development Plan and have it approved. See 2.3 Impact of Community Relations on Mining Projects for further information.

While the government of Afghanistan has created an investment-friendly environment in the mining sector, there have been scattered incidents where the local communities have had issues with mining on a large scale. Having said that, the sector has only very recently been opened for investment and it will take time for the communities to realise the benefits thereof.

Climate change initiatives have the potential to impact the mining industry in Afghanistan. The strict requirements in relation to the protection of the environment, which have very limited exceptions, definitely have an impact on the mining sector.

Specific climate change legislation related to mining has not yet been enacted in Afghanistan, but a Climate Change Directorate (CCD) was established in 2010 under NEPA, to work on climate change and its impact throughout the country. The CCD’s work is based on the Environmental Law and Afghanistan’s commitments to the objectives of the United National Framework Convention on Climate Change, and is responsible for addressing climate change in Afghanistan, in terms of both adaptation and mitigation. The CCD monitors climate change in projects and is involved in all stages of the project. It also assesses the vulnerability and builds adaptive capacity and increases resilience in order to save the ecosystem and decrease threats from unexpected climatic risks, or to stabilise the situation. The CCD is also in the process of preparing the Climate Change Strategy and Action Plan.

The decisions of the CCD could have an impact on licences issued in the mining sector, but it is too early to be able to assess the full impact on the mining industry of any potential decisions of the CCD.

There are some sustainable development initiatives under the Minerals Law. 5% of revenue paid into the general revenue account of the state under the Minerals Law in connection with exploration licences and exploitation licences and 8% of revenue in connection with small-scale mining licences is appropriated annually into the Provincial Development Fund, and then invested in initiatives for the benefit of the province or transferred to the Municipal Incentive Fund and invested in initiatives for the benefit of Municipalities in the province in which the relevant licence is situated.

Licence-holders and their contractors, advisers and employees are liable to pay all applicable taxes and duties in accordance with the law of Afghanistan. Pursuant to the provisions of the Afghanistan Income Tax Law 2009, income from the discovery and extraction of any minerals or petroleum, or from any other sources and benefits from mining licences and mining authorisations is taxable. The income tax for legal persons is 20% of taxable income for the tax year. Income of investment corporations is subject to income tax on all income from dividends, interest, discounts, rents, service charges, fees, commissions and gains from capital transactions.

The exploration licence-holder is not obliged to pay any royalties as it is not allowed to sell the product, but holders of exploitation licences and small-scale mining licences must pay the royalty and surface rent.

Royalties are revenue-based and are paid into the general revenue account of the state. The MoMP is responsible for collecting all royalties, surface rents, fees and penalties payable under the Minerals Law. Royalty rates for minerals, other than construction materials, are set out in the Minerals Law. The royalty rates are 7% for a Primary Product, 5% for a Secondary Product and 2.5% for a Tertiary Product.

A licence-holder is required to lodge a Royalty Report within 30 days of the end of each quarter to the MoMP, and must pay any royalty due in respect of that quarter. A licence-holder is also required to submit audited accounts to the MoMP. If the audited accounts disclose any shortfall in the payment of royalties, the licence-holder shall pay the shortfall within 28 days. The MoMP must, at the request of the MTC, conduct an audit to determine whether the content of a Royalty Report is true and accurate. The licence-holder is obliged to provide any information or documents requested by the MoMP. If shortfalls are found, the licence-holder may be liable to a penalty or can be prosecuted for providing false information in a Royalty Report.

Afghanistan does not make a distinction between taxing national and foreign investors. However, national investors (resident legal persons) are subject to income tax on taxable income from all sources within and outside Afghanistan. Non-resident natural persons and non-resident legal persons (foreign investors) engaged in economic, service or business activities in Afghanistan are subject to tax on their income from sources within Afghanistan.

There are no tax incentives for mining investors and projects, and no tax stabilisation agreements are available.

The Afghanistan tax system imposes a transfer or capital gains tax on the transfer or sale of a mining project. Pursuant to the provisions of the Income Tax Law of Afghanistan, the gain from the sale or exchange of capital assets or investment in trade or business shall be subject to income tax. The gain from the sale or exchange of any asset of a corporation or a limited liability company is taxable income in the tax year in which assets were transferred. Moreover, the gain from the sale, exchange or transfer of business, equipment, machinery, buildings and land, or any part of such assets, is taxable income. Tax is determined based on the market value at the time the asset was transferred or exchanged.

These tax levies do not apply when the transfer takes place through a corporate structure outside Afghanistan.

Profit from the sale of minerals extracted from mines in Afghanistan represents the principal attraction for investment in the mining sector.

There are no special rules on foreign investment approval in Afghanistan. Anyone who intends to operate a business in Afghanistan is required to have a business licence from the Afghanistan Central Business Registry (ACBR). Foreign investors have to register their entities with the ACBR in order to be eligible to participate in the bidding process for the mining contracts. After obtaining a licence from the ACBR, the registered foreign investment has to submit an application for a mining concession to the MoMP. According to the Minerals Law, foreign natural and legal persons, or entities whose majority shareholder is foreign, are not eligible to hold a small-scale mining licence, but can hold a large-scale mining licence following receipt of an investment licence from the ACBR. A legal entity must have an office or place of business in Afghanistan prior to executing a mining concession.

Foreign investors registered with the ACBR or domestic investors can obtain a mining concession. There are no specific restrictions for obtaining the concession, except the restriction that a foreign national and legal person is not eligible to hold a small-scale mining licence.

Moreover, pursuant to the Private Investment Law of Afghanistan, all persons (foreign or domestic) may make investments in all sectors of the economy, except the development of nuclear power, the establishment of casinos, gambling and similar establishments, and the production of narcotics and any other intoxicants.

Afghanistan has not entered into any bilateral or multilateral agreements for investment in the mining sector.

The two main sources of financing for the development of mining projects in Afghanistan are:

  • an internal source, such as commercial banks and semi-governmental banks; or
  • an external source, such as foreign governments, USAID, the European Union, international financial organisations such as The World Bank, the IMF, the Asian Development Bank (ADB) or the Islamic Development Bank, and private companies.

Afghanistan does not currently have an active financial market that deals in financial securities, but the government of Afghanistan is planning to establish a securities market in the near future. Such a market would play an important role in the financing of exploration, development and mining projects in Afghanistan.

There are currently no aspects of the Afghan legal system that relate to security over the financing of mining tenements (licences) and related assets.

The outlook for growth and development in the mining sector in Afghanistan is quite favourable. The country has abundant deposits of a wide variety of resources and has developed a cohesive and energetic plan to allow for the orderly and efficient exploitation of these mineral deposits. There have been no changes in legislation brought on by the COVID-19 pandemic, and the virus has not had an appreciable effect on activity in this sector. The government has recently resumed the bidding process for the allocation of mining contracts to interested extraction entities.

Afghanistan has extensive mineral resources in every province of the country, including world-class deposits of iron ore, copper, gold, rare-earth minerals and a host of other natural resources. Other natural resource endowments include oil, natural gas, copper, coal, marble, gemstones, construction materials, lithium and other industrial minerals, all of which offer an immense diversity of development opportunities. The principal mineral resources that are currently being exploited are oil and gas, coal, marble and – especially – lithium.

Based on the Mining Sector Roadmap + Reform Strategy: Extractive Industries published by the Ministry of Mines & Petroleum of the Islamic Republic of Afghanistan in 2019, Afghanistan is estimated to hold more than 2.2 billion metric tons (MTs) of iron ore, 1.3 billion MTs of marble, almost 30 million MTs of copper, 1.4 million MTs of rare-earth minerals, and 2,700kg of gold. It is estimated that Afghanistan has more than USD1 trillion of mineral resources. The mining sector has thus far remained under-developed in Afghanistan. For the purpose of developing this sector, the High Economic Council approved the Mining Sector Roadmap in January 2018. The Reform Strategy has been developed to assist as an implementation mechanism for the Mining Roadmap, to institutionalise reforms and develop the sector in a way that maximises its benefits for the citizens of Afghanistan. The vision of the MoMP is to develop a knowledge-based, sustainable, transparent and efficient extractives sector that supports Afghanistan’s broad-based equitable development. H.E. Mohammad Ashraf Ghani (President of the Islamic Republic of Afghanistan) has stated that “The government of Afghanistan is committed to an open and accountable mining sector, as it represents the greatest opportunity to increase economic growth rates in the country, to sustainably utilise our natural capital to create the financial capital to expand and ensure the freedoms, rights and securities enshrined in our constitution is the vision that guides us.”

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Law and Practice in Afghanistan

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RIAA Barker Gillette (RIAABG) is an internationally recognised law firm, and one of the largest and most well-reputed international firms in the region. It maintains the highest standards of professional excellence, and is affiliated with the finest global law firms in more than 106 jurisdictions around the world through its membership of Lex Mundi. The firm established an office in Kabul in 2009, to better represent the interests of clients in Afghanistan and improve its access to information and translations of current laws, and to facilitate working with relevant government authorities. The strong team of dedicated, qualified and experienced lawyers provides a broad spectrum of legal services. Lawyers in the Kabul office are fluent in both official languages of Afghan laws (Pashto and Dari), as well as English. The firm is active in the areas of project finance, M&A, privatisation, power projects, oil and gas projects, infrastructure projects, banking and finance, intellectual property, non-profit and social sector development, employment and labour law matters, telecommunications, construction, mining, pharmaceuticals, regulatory affairs, customs, corporate registration, corporate restructuring, joint ventures, public-private partnerships, and taxation.