From: Aftenposten
Date: 05.10.2009

Dette dokumentet er omtalt i følgende artikkel:


C O N F I D E N T I A L SECTION 01 OF 02 KABUL 003101
SIPDIS
E.O. 12958: DECL: 10/15/2019 
TAGS: EMIN, EINV, ENRG, PREL, SENV, AF 
SUBJECT: Security and Social Issues at Aynak Copper Mine
 
Classified By: CDDEA Ambassador E. Anthony Wayne for 
reasons 1.4 (b) and (d).

1. (C) Summary: Problems are delaying progress on the 
massive Chinese Aynak copper mine project, Afghanistan?s 
single largest foreign investment to date totaling almost 
USD 3 billion in infrastructural investment. While the 
mine has twice the police force of the rest of Logar 
province and benefits from nearby ISAF presence, the 
China Metallurgical Group (MCC ? the mine?s contract 
holder) reports security threats are delaying progress at 
the facility. Minister of Mines Ibrahim Adel blames the 
Ministry of Interior for not equipping the Aynak police. 
Meanwhile, contacts at the Ministry of Mines admit the 
first ten percent of MCC?s USD 808 million signing bonus 
to the Ministry of Mines is "long gone" and cannot be 
used for Aynak?s security. World Bank-funded technical 
advisors at the Ministry of Mines argue the best way to 
improve security is to create local employment at the 
mine and in auxiliary support industries. However, they 
express concern that MCC plans the minimum contractually- 
allowed local sourcing. For this reason, the Ministry of 
Mines is seeking ways to encourage the development of 
Afghan support industries to enhance security through 
local buy-in. End summary.

Background on Aynak Mine 
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2. (C) The Ministry of Mines awarded MCC the contract to 
develop Aynak copper mine in April 2008. MCC is now 
compiling a feasibility study for the Aynak copper mine, 
requiring additional on-site drilling to confirm the 
orebody's geology and an environmental/social assessment 
of the proposed project. Once the Ministry of Mines 
reviews the study, the mine?s design, procurement and 
construction is projected to take another two to three 
years. The MCC also has a contract with the Ministry of 
Mines to construct a coal mine and 400MW power plant, 
with half the power supporting the mine and the rest 
going to the national grid. Reportedly, MCC has also 
signed a memorandum of agreement committing to lay a rail 
line running north and south, connecting Aynak with the 
proposed Hajigak iron mine and its associated coking coal 
mine in Bamyan province.

Delays Certain 
- - - - - - -

3. (C) Although the mine was originally projected to 
begin production in 2012, observers say MCC faces at 
least a five year delay in bringing the mine into 
production. At full capacity, the copper mine is 
expected to produce 200 thousand tons of refined copper 
per year, earning Afghanistan approximately U.S. USD 450 
million annually and creating over 10,000 direct and 
indirect jobs. An Afghan-American contractor for MCC 
says the mine currently contracts three local 
construction companies and employs 300 to 400 people. 
During a recent visit to the mine, however, few Afghan 
workers were visible. The MCC has roughly 80 Chinese 
employees on site. Eventually MCC estimates direct 
Afghan employees will number around 3000.

MCC Meets with Mining Minister 
- - - - - - - - - - - - - - - -

4. (SBU) During a September 17 meeting with Mining 
Minister Adel, Aynak Police Commander Mohammad Mosen, and 
U.S. military and civilian representatives, MCC-Aynak 
President Zou suggested that MCC may not build a rail 
line for Aynak. Minister Adel insisted that MCC has a 
contractual commitment to install the line, but admitted 
in a later aside that the rail contract had not yet been 
signed.

5. (C) Security quickly became the principal topic of the 
meeting. MCC Aynak President Zou urged Minister of Mines 
Adel, as representative of the Afghan government, to do 
more to secure the mine site. Insurgents had fired two 
rockets at the site the night before, and MCC officials 
reported they had lost several days of work due to IEDs. 
There were, however, no casualties in these incidents.

6. (C) The Afghan government is responsible for Aynak's 
security, according to an initialed copy of MCC?s Aynak 
contract obtained by the Embassy. There are now 1500 
Afghan National Police (ANP) assigned to Aynak. (Note: 
In comparison, fewer than 800 ANP are assigned throughout 
the rest of Logar province. End note.) At the same time, 
police at the mine have fewer than 20 vehicles. During 
the meeting, Minister Adel openly blamed the Ministry of
Interior for not better equipping the Aynak police. 
Other contacts at the Ministry of Mines later reported 
the first USD 80.8 million of MCC?s USD 808 million 
signing bonus to the Ministry of Mines is "long gone" and 
cannot be used for Aynak?s security.

7. (C) The U.S. Task Force Spartan Commander reminded 
Adel the copper mine's district is the most secure in 
Logar province. Besides 1,500 Aynak police, there are 
regular ANP, Afghan National Army personnel, a Jordanian 
battalion, and U.S. Forces based at the district center 
nearby. Aynak ANP Commander Mosen welcomed an offer to 
conduct a few joint patrols to the surrounding villages 
with the Aynak ANP in the lead.

The Best Security: Local Buy-In 
- - - - - - - - - - - - - - - -

8. (C) In a separate meeting on September 19, World Bank- 
funded technical advisors to Minister Adel told emboffs 
community buy-in is the best way for MCC to achieve 
greater security at Aynak. The Aynak contract requires 
all unskilled laborers and a percentage of skilled 
laborers to be Afghan. The MCC is also obligated to 
build schools, set up a technical training center and 
construct a 400MW power plant with associated coal mine 
over the longer term. Ministry of Mines advisors point 
out, however, that MCC is currently doing little to 
create work for the surrounding villages. When asked by 
Minister Adel, Mr. Zou said MCC is training local farmers 
to grow Chinese vegetables, but he could offer no other 
examples of community involvement projects.

9. (C) Communities near the mine are frustrated few jobs 
are available, according to ISAF contacts. They know the 
mine is rich in resources but they have yet to receive 
any benefit and are as yet unaware that production will 
not commence for years. With MCC facing production 
delays of at least two-and-a-half years, local 
disappointment is likely to grow unless MCC finds a way 
to encourage local private sector growth to support 
increasing mine needs.

10. (C) When Zou noted MCC will import most of its 
supplies from abroad, Minister Adel countered that MCC is 
contractually required to buy locally when price and 
quality are comparable. (Note: The draft contract 
obtained by the Embassy stipulates that prices are 
compared before import duties are added, making it likely 
Chinese imports will be cheaper than local goods. MCC's 
disinclination to buy locally will limit indirect 
employment. End note.)

Comment 
- - - -

11. (C) The U.S. is currently seeking ways to encourage 
Chinese government non-military support for Afghanistan. 
One way for the Chinese government to help Afghanistan 
would be to create more near-term jobs to support the 
Aynak copper mine and to encourage more local 
procurement. Chinese government projects to support the 
Aynak mine and create employment could focus on 
agribusiness (to help feed employees), transportation 
corridors, and finance for small businesses. We will 
continue to monitor Aynak's progress closely because the 
project?s success or failure will affect future foreign 
investment in Afghanistan, notably the large Hajigak iron 
mine in Bamyan province. That project has attracted bids 
on a pending tender from MCC, five Indian companies, and 
a Pakistani/Saudi joint venture. End comment.

EIKENBERRY