Treasure Land

Ohammad Qayem Zayee squats on the edge of the mountain, letting a plastic wrapper from his sponge cake catch the breeze and skitter away. Qayem, 26, doesn’t usually stop for breaks during the two-hour trek up to his mine in Afghanistan’s Panjshir Valley, but his feebler guests have to catch their breath. As they do so, Qayem, wearing a heavy five-o’clock shadow and an oversize fatigue jacket, ponders his chosen profession: emerald prospecting. “If we find something, we can make millions; if we don’t, we keep working,” he says, looking out over the deep valley to a ridge of sharp, snowy peaks.

The forbidding mountains of Afghanistan have been many things to many people over the centuries: a place to hide from enemies and to find them, a place to plot invasions, and a place for humbled invaders to beat a retreat. For the emerald miners of Panjshir, a province northeast of the capital, Kabul, the mountains mean money. On approach, it takes a moment to absorb the enormity of the fly-by-night mining operation. Scores of makeshift holes have been blasted into the steep, terraced slopes, giving the barren rock the look of a gray honeycomb. Panting hard, we reach Qayem’s mine, and his brother Mohammad Shapoor Zayee leads us inside. Our way is lit by a hissing kerosene lamp, and water drips from the low rocky ceiling to the wet dirt floor. Shapoor’s headlamp illuminates a patch of wall where a yellow streak — a hydrothermal alteration vein, in geologist parlance — runs through the rock. Here, says Shapoor, “is where we’ll find the emeralds.”

(PHOTOS: Treasure Land: The Mines of Afghanistan by Yuri Kozyrev)

Twelve years after the U.S.-led ouster of the Taliban, Afghanistan is struggling. The economy is propped up by outside aid, and the transfer of security operations to poorly equipped local forces has seen a rise in violence. Hard-won freedoms, especially for women, are starting to slip away in the parts of the country falling back under Taliban control. As most foreign troops get ready to leave next year, eventually taking millions of donor dollars with them, the country’s wealth of natural resources is needed more than ever.

A handful of licenses have now been granted for oil and mineral exploitation, and the government could earn average revenues of up to $250 million annually for the next 25 years if its nascent oil production develops. But the U.S. government speculates that the long-term profits to be reaped from deep reserves of iron, copper, gold, rare earths, lithium and gemstones are much greater — as high as $1 trillion. Even so, Kabul has yet to really tap into mining as a revenue earner. In 2010 the sector contributed less than 1% of GDP. “Afghanistan was never a major mining country,” Wahidullah Shahrani, the Minister of Mines and Petroleum, told TIME in May. “No one can remember in the last one or two centuries a time when we have ever been able to produce a single ton of iron ore, or a kilogram of copper, or an ounce of gold.”

Hefty foreign investment is essential every step of the way — from exploration to training staff to building the rail links and roads needed for minerals to be shipped out — if mining is going to be a cash cow. Once that groundwork is laid, protecting investors’ capital, both financial and human, will be paramount. Security is already deteriorating in places where the government is trying to sell exploration permits. On Aug. 15, three Afghan engineers working for the Ministry of Mines in northern Baghlan province were reported to be kidnapped. “[Investors] are aware of the potential risks in Afghanistan,” says Shahrani. “But they are also well aware of the potential opportunities.”

(MORE: U.S. Purchases Fuel for Afghanistan, Possibly Undermines Own Iran Oil Sanctions)

The authorities have yet to enact a new, more investment-friendly mining law that would, among other things, guarantee companies exploring a site the first rights to mine it. And, given the scale of corruption, there is the fear that much of the investment and yield could get siphoned off. “There is potential in the country, but it’s how you manage it,” says Atiq Sediqi, an adviser to the Ministry of Mines. “If it goes into pockets, like it has in Congo or Nigeria, then we’re doomed.”

Drawing a Treasure Map
It’s a clear may day, and Bob Tucker is glued to the window of the helicopter, watching the bare, craggy mountains outside Kabul slip beneath. “It’s a geologist’s dream,” he shouts over the noise of the rotors. “This is beautiful.” We are on our way to Mes Aynak, one of the world’s largest undeveloped copper deposits. In 2007 the government awarded a Chinese consortium, the Metallurgical Corp. of China (MCC) and Jiangxi Copper, the rights to mine Mes Aynak for some $3 billion. Tucker works for the U.S. Geological Survey (USGS), which has been helping Kabul assess Afghanistan’s natural resources, and he plans to take rock samples to explore for copper and other base metals outside of Mes Aynak. Half an hour after lifting off, our helicopter lands lightly on a dusty red-dirt clearing outside the gates of the Mes Aynak mining area. Tucker, carrying a small pickax, alights and charges into the rocky foothills.

MORE: What Iran and Pakistan Want from the Afghans: Water

Mapping the terrain for deposits is particularly challenging in Afghanistan. Besides the obvious danger from the Taliban, many possible locations are “inaccessible,” says Jack Medlin, head of the USGS program. “This country is remote. There are very few roads. Trying to do it on foot or horseback or yak or whatever would have taken years.” Instead, USGS geologists have used hyperspectral imaging, which measures sunlight reflected off the surface of the earth. Minerals have unique properties based on their chemistry and composition that cause them to absorb light in a characteristic way. By reading data from a certain location, geologists can determine what minerals are likely to be present. Throughout 2007, pilots flew a two-seater plane back and forth over Afghanistan at about 15,000 m. They took measurements that eventually formed the basis of an 800-page study identifying 24 potentially significant deposits of copper, chromium, tin, cobalt, gold, iron and emeralds, among others. The findings were hugely promising yet almost completely ignored, because many companies deem Afghanistan too dangerous. “Normally, investors would send someone in and begin to collect samples and do additional mapping,” says Medlin. “But after we published the report, no one showed up.”

So geologists like Tucker have fanned out to dig around and prove what’s out there. “Oh, looky here,” Tucker says, pointing to a greenish rock in an outcropping, an indicator that copper is near. “That’s a good sign.” He uses the pickax to shear chunks of the rock off to take back with him for testing. If he can find similar-age rocks outside Mes Aynak, that means there could be another major mineral deposit to be licensed off. USGS has put its findings online for potential investors around the world to peruse. So far, Chinese and Indian groups have led the way, with the Chinese winning the bid for Mes Aynak and the first active oil field in the north, and Indian and Canadian groups winning the rights to a vast iron deposit in central Bamyan province. If they do well, bigger players may follow. Says Tucker: “We’re trying to use science to help the Afghan people find a path out of this morass.”

(PHOTOS: Afghanistan Now)

Rock of Ages
That’s the best-case scenario. But Mes Aynak reflects how, in Afghanistan, little happens as planned. Inside Mes Aynak’s gates is a cluster of long, blue-roofed buildings built by MCC. Hundreds of Afghan security guards stand sentinel atop hillocks throughout the site. The camp appears to be largely empty, evacuated last year after an attack by insurgents, but the project ran into a roadblock long before that. Buddhist statues and stupas dating back some 2,000 years salt the very spot where MCC aimed to start mining. The Chinese have halted operations while an international team of archaeologists, helped by local villagers, digs up and moves out the artifacts. It’s unclear when MCC will be able to resume. Many argue that it shouldn’t, and that Afghanistan’s cultural heritage could prove as valuable as a tourist draw as the nascent mining industry. In May, the Ministry of Mines said that, despite issues with security, land acquisition and the Buddhist ruins, MCC’s contract stood, but the minister recently told Reuters the consortium has asked for a major review of the deal. “If we could keep the site [for archaeology], it would be better for Afghanistan,” says Abdul Aziz Arib, the official who oversees Mes Aynak. “But the country has a lot of economic problems, so the mining needs to happen.”

There are other, more significant challenges. Several villages have been relocated to make way for MCC, and more will be if the project continues. Arguments over what kind of compensation the government should pay displaced residents have been bitter. In 2009 the Washington Post reported another kind of handout: that the previous Minister of Mines, Mohammad Ibrahim Adel, accepted some $30 million in Dubai to award the contract to the Chinese. Adel denied the accusation, but the flap underscored what many have said all along: that oil, gas and mining money will only fuel the corruption that has plagued the country. “The U.S. has peddled this idea that minerals are going to be the economic future of Afghanistan,” says Heather Barr, a researcher with Human Rights Watch. “Once you have the revenue, who gets it? Unless something big changes, there’s no reason to think that this money will go [anywhere but] into a few pockets.”

MORE: Unease in Afghanistan as Foreign Troops Withdraw and Aid Shrinks

The government, for its part, objects to such criticism. In 2012 the government scored well above average in the spending of its development budget on the Open Budget Index, a widely used measure of transparency. Local authorities have also been cooperating with international donors to improve revenue collection in areas like customs and taxes. Omar Zakhilwal, Afghanistan’s Finance Minister, told TIME in an interview in May that the country has been trying to comply with the Extractive Industries Transparency Initiative (EITI), an international standard that promotes accountability by, among other things, requiring companies and governments in EITI-compliant countries to disclose their oil, gas or mining revenues in regular reports. “We already have one of the best systems for revenue collection and for financial management in developing or postconflict countries,” said Zakhilwal. “We have met most of the transparency requirements [for EITI]. That’s a remarkable achievement for a country like Afghanistan.” In April, EITI issued a report saying that while Afghanistan had achieved “meaningful progress,” it needed to do more to make the organization’s list of 23 fully compliant countries.

Boom or Bust?
Morad Ali isn’t waiting for his government to catch up. Scrambling lightly over a rocky outcropping high in the mountains of northern Baghlan province, Ali points out a deep, narrow hole dug into the rock. “I was 11 or 12 when I started working here,” says Ali, now in early middle age. For generations, he and other residents living in the low-slung village at the foot of the hills have hacked into the rock, pulling out chunks of gold-encrusted rock on a few lucky days to sell to local traders for cash. Today, for his intimate knowledge of the terrain, Ali receives a small salary from Afghan Gold and Minerals Co. Ltd., a Kabul-based private company. “Once I found 12 g of gold in a 7-kg stone,” Ali recalls. “But that was during the Taliban [rule], so we didn’t get much money for it.”

(Young Afghans Flock to Higher Education, but Jobs Remain Scarce)

Today, the authorities require companies to contribute materially to the areas they mine. Amounts vary per contract, but Afghan Gold says it spent $100,000 last year on social programs for Qara Zaghan village in Baghlan. The company says it rents village houses for its staff, gives residents jobs, bought a school bus and fixed a small hydropower plant. Chairman Sadat Naderi says all that is in Afghan Gold’s self-interest too: “Wherever you go, without having the locals on your side, it’s not going to be possible to work.”

When company personnel and their guests show up in this valley of wheat farms, they do so in a convoy of SUVs with armed guards. Their presence feels like a military occupation. Villagers say, however, that the company’s investments have meant residents don’t have to migrate to Kabul to find work, as is mostly the case elsewhere. “If there were no gold, people who didn’t own land would have to leave,” says Noor Mohammad, a 53-year-old farmer who carries a rubber slingshot to keep birds off his crops. He takes aim at a scarecrow about 50 m away — and hits it. “It’s peaceful here,” he says. “More peaceful than Kabul.”

Keeping people like Mohammad happy is critical to the industry’s success. So is the Afghan military. For instance, in Bamyan, home to the big iron-ore deposit awarded to the Indian and Canadian companies, violence has been increasing and could threaten to slow progress on the mining deal. “If the security is O.K., we’ll keep growing,” says Samandar Popal, a geologist with Central Asian Mining Services, an exploration and support company related to Afghan Gold. “If it gets worse, we won’t.”

Still, hope drives everyone: the government, the corporations and individuals seeking to strike it rich. Mohammad Qayem Zayee, the mine manager in Panjshir, drinks a cup of hot, milky tea on a dusty carpet in the tent where his team of seven miners lives when on duty. Each month, Qayem’s investors, an informal group with cash to spare and a penchant for risk, pool together about $2,500 to equip a small crew like this with dynamite, fuel, tea and biscuits. If they find a big emerald, everyone gets an equal cut — Qayem, the miners and the investors. They haven’t found any big stones yet; the older men in the group grumble that the mines no longer yield what they used to. But the potential is what sustains all of them. Potential is what these mountains are all about.

PHOTOS: Another Side of Afghanistan by Larry Towell