Trump might stay in Afghanistan for minerals

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"We're nation building, we can't do it. We have to build our own nation," then-Candidate Donald Trump told the Guardian's Ben Jacobs in October 2015.

Throughout his presidential campaign, Donald Trump railed against nation building. But now it appears he might be considering doing just that.

Trump is considering staying in Afghanistan to help mine for minerals because he believes it will be a "win-win" for both countries, according to a report in The New York Times.

Trump thinks this prospect "could boost [Afghanistan's] economy, generate jobs for Americans and give the United States a valuable new beachhead in the market for rare-earth minerals, which has been all but monopolized by China," the Times said.

But deploying more troops to help guard mines for American companies would endanger US national security, Laurel Miller, a Rand Corporation analyst and former US diplomat to Afghanistan, told Business Insider.

It "would be an excellent propaganda point for the Taliban," Miller said, adding that "decisions based on sending troops are best made on national security interests."

Miller said that the national security risk would be eliminated if the US opened up bidding to companies worldwide, which would still benefit Afghanistan's economy too.

Opening up bidding, however, would risk American lives and treasure to help build Afghanistan's economy - something Trump said he opposed during the election.

The White House has been trying for months to figure out what to do about Afghanistan, and has been toying with the idea of sending 3,900 more US troops into the longest running war in American history, which is going on 16 years.

Trump has thus far seemed reluctant to deploy more troops, and evenreportedly refused to sign off on H.R. McMaster's deployment plan, devised during a Cabinet meeting that was described as a "sh-- show."

But Trump's advisers, as well as Afghan President Ashraf Ghani, appear to have sold him on mining, the New York Times said.

Some of Trump's aides met with Michael N. Silver, the CEO of a chemical company called American Elements, about how to mine the minerals, the New York Times said.

Stephen A. Feinberg, the CEO of Cerberus Capital Management, an investment conglomerate that owns DynCorp, a large defense contractor that could help guard the mines, is also keen on the idea, the New York Times said.

Feinberg, who donated more than $1 million to the controversial Trump Super PAC Rebuilding America Again, has also been informally advising the president. He even developed plans with Blackwater Founder Erik Prince to flood Afghanistan with private contractors, but they were declined by Defense Secretary James Mattis.

More than 2,200 US troops have died and more than 20,000 more have been wounded since the war began in 2001. There are currently more than 10,000 US troops there, where the US is spending roughly $3.1 billion a month.

http://www.businessinsider.in/Trump...US-national-security/articleshow/59849633.cms

So, its all about taking Afghan minerals!!!!!

 

[RoadRunner401]

This is almost amusing actually, Donald Trump is reported, in the New York Times, as thinking that Afghanistan's valuable mineral deposits might be a good reason for the US to stay in that country. The humour here coming from the role of the New York Times in misreporting the value of the minerals in Afghanistan some 7 years ago. True, they weren't the original source but they certainly propagated the mistake enthusiastically.

The point being that there are a lot of rocks in Afghanistan, those rocks contain metals and if the metals were out of the rocks and out of Afghanistan then they'd be valuable. But they're not out and out, the metals are still in the rocks in Afghanistan and thus aren't valuable. As we can tell from the fact that no one is lining up to pay for them.

Thus the idea that the US should stay there in order to aid in exploiting this value doesn't really work out, there's no value to be exploiting. This is the bit the NY Times just doesn't get:

Trump has talked with President Ashraf Ghani about possible opportunities for American mining companies in Afghanistan, according to a report by The New York Times. Three of Trump’s senior aides also met with Michael N. Silver, an executive at the chemicals firm American Elements, about the possibilities for mining rare-earth materials in that country. American officials initially estimated that Afghanistan’s mineral deposits could be valued at as much as $1 trillion, although that number has been revised downward since.

Well, yes, but the value hasn't been revised downward enough. To a reasonable level of accuracy the current value of those Afghan mineral deposits is zero.

In addition, Mr. Feinberg has reached out to people involved in the Obama administration’s effort to build Afghanistan’s mining industry. Some warned him that the prospects for a profitable business are worse now than in 2009, given the decline in commodities prices and the deteriorating security in areas where the deposits are believed to lie.

Afghanistan’s deposits of copper and iron ore are trading at about a third of their 2010 prices. Most of the undiscovered deposits of rare-earth minerals are believed to be in Helmand Province, large parts of which are controlled by the Taliban.


No, that's not the reason the value should be downgraded at all. In fact, the Times is compounding its error. There is no trade in deposits of minerals. So we can't talk about a trading price for them. The trade is in copper, copper ore and iron ore. Which is a very, very, different thing. The Times got this wrong all the way back in 2010 as well:

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

That was the Obama Administration trying to find some reason as to why Afghanistan was an interesting place for US troops but it's the same error. As I explained elsewhere way back then:

For what the report actually does is value all those metals in the dirt - dirt at the end of a two-goat highway - at their full current market value. Full current market value without including the costs of digging them up, processing them or transporting them. The top three minerals they claim to have found are iron ore, copper and niobium.

The iron ore has a supposed value of $420bn. This entirely ignores the fact that iron ore is a low-value, bulky commodity. So low-value and bulky in fact that it is normally transported by sea. Yes, I did check and no, Afghanistan is not notably well supplied with either ports or sea access. The only alternative is a railway to China, but there's the odd mountain in the way there.

The second is copper concentrate at $240bn. Such concentrates have the same problem as iron ore, although you can refine it to copper cathode which is easier (and as a percentage of value, of course much cheaper) to transport. But this requires lots and lots of electricity. More electricity than an economy worth $12bn has. We're rather getting to thinking that Afghanistan must be a developed economy to exploit this resource, rather than this being a resource to exploit to develop Afghanistan.

The third is niobium at $80bn. You'd think that US-based boosters would at least check with their own experts on niobium at the USGS. There they would find out that this is some 600 years' supply for the US. Try bringing that sort of volume to market and of course prices are going to plunge.

No, the basic problem with this “analysis”, this $1 trillion number, is that it's measuring what everything would be worth as metal, outside Afghanistan, rather missing the point that it's currently not metal and is inside Afghanistan.

Global Witness has been known to make this same mistake, as have rather too many of those asteroid miners. The value of a mineral deposit is not the value of the metal once it has been extracted. It's the value of the metal extracted minus the costs of doing the extraction. And as a good enough rough guess the costs of extracting those minerals in Afghanistan will be higher than the value of the metals once extracted. That is, the deposits have no economic value.

Sad to say but President Trump is getting some seriously bad economic advice if he believes that Afghanistan has swathes of mineral deposits of huge value. It doesn't, it has some rocks with metals in them, not the same thing at all.
https://www.forbes.com/sites/timwor...ry-valuable-theyre-really-not/2/#4c2b783f26c7