Facilities for Investment in Mining Sector

Afghanistan has a history of miningrelated activities for centuries inZarkashan, Angor,Para Pamir,Tolak and Aynak areas. But its vast natural resources remained largely untapped. So there are widespread opportunities inthe mining sector,but in the past twelve years, with the country emerging from decades of conflict has not witnessedsubstantial investment.

Recently, a number of foreign and local companies have shown their interest to invest in Afghanistan followingrecent surveysconducted by the US, which has revealed viable mining opportunities,in terms of quality and quantity.

But investment in Afghanistan requires incentives,especially in the mining sector and without the much-needed facilities investors are not willing to commit their money into the sector, but prefer to stay away.

Despite many problems, progress has been achieved in recent years in terms of investment. For example, laws for private sector investment have been approved as the country had no such law in past. According to the Ministry of Finance, it has plansto launch a big ‘investment opportunities’ programme, which will provide the investors and industrialists – both foreign and local– withattractive incentives.

Based on the plan, any investor who invested up to one million dollar or more in 2013 and continuedtheir work till the end of2014,would be provided with free land and exempted from tax for ten years and without anytax on raw materials. Even though the decision was taken late, butit was regarded as an important step.

Two other areas are rather important in this regard:First, the required energy suppliesfor investors and second,guarantee of sale of products in the local markets.Recently, the government has decided toprovide electricity to the investors.

There also is the serious problem of maintaining security to instil confidence in theinvestors and their workers. They should be provided with enhanced security so that they can work in an environment free of fear. But in the given situation, lack of security on highways and some provinces create serious problems for investors andsuppliersofgoods, which virtually paralyse the growth of the country.

The government should expedite efforts to offer long-term loan system so that investors can utilize the loan for extraction of minerals.The government is striving to reform law and attract more investors in the mining sector.

According to the Ministry of Mines, more facilities are being mulledfor private sector such as generalisation of biddings, elimination of unnecessary deadlines and simplification of technical and legal terms. It ishopedthat theseamendmentswillresult in increase ofinvestmentinthe mining sector in the country.  In addition,the government has worked out a range of policies liketax exemptions for investors’ construction equipment imported to the country and reducingcustoms dutieson rawmaterials.

Ifthe above-mentioned measuresare properlyadopted and implementedthen it will attract more foreign and local investors in the country’s rich mining sector.

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