1. An Enabling Investment Climate: Afghanistan Oil, Gas and Mining
What the Sector Can Provide – inclusive, integrated growth by leveraging large, private-sector anchor investments into mining, oil & gas
Michael Stanley, Mining Lead
World Bank Group
Washington, D.C.

2. Challenges Ahead field security
long lead times for exploration / development
“good fit” policy, legal & regulatory frameworks
land acquisition / ROW
risk mitigation
shared access infrastructure
strengthening institutions / building adsorptive capacities

3. The Enabling Investment Climate:
Geodata, Institutions & Adsorptive Capacity
What investors want
Geological Potential – access to mineral resources
Geodata
Conducive Investment Climate – banking, repatriation of profits, realistic foreign exchange controls
Investment Laws
Security of Tenure – transparent, non-discretionary exploration / mining rights and regulations
Mining Cadastre
Consistency of Mineral Policy – competitive fiscal conditions, stability of exploration / exploitation terms and conditions
Mineral Policy
Tax Legislation
Stability of Legislation – predicability of exploration / mining terms and conditions, tax liability, fiscal regime. Good enough fit
Mining, env. / social, and tax regulations
Availability of Infrastructure
Public Private Partnerships
Modified after (a) Transitional Islamic State of Afghanistan: Mining as a Source of Growth, Report No AF, The World Bank 2004; and (b) James Otto – A Global Survey of Mineral Investment Preferences, Mineral Investment Conditions in Selected Countries of the Asia Pacific Region (United Nations ESCAP 1992).

4. Geodata

5. Pre-Competitive Geodata
USD/km2
MINE
DEVELOPMENT
Aynak
>10,000,000
1,000,000
DETAILED
EXPLORATION
PUBLIC FUNDING
Hajigak
100,000
Sherbegon
PRIVATE FUNDING
100
REGIONAL
EXPLORATION
REGIONAL
GEOLOGICAL
MAPPING
MINERAL
RESOURCES
ASSESSMENT 10

6. Good Fit Policy, Legislation, Regulations

7. The Enabling Investment Climate:
Strengthen Institutions and Build Adsorptive Capacity
Effective Sector Policy
Transparent, non-discretionary licensing / award of contract procedures (first come and tenders)
“Good fit laws and regulations”
Good fit regulations, improved implementation
Non-discretionary, transparent contract monitoring and compliance procedures
Transparent and efficient implementation of royalty and tax regime
Development of a robust inspection regime to check compliance with health, safety and environmental standards

8. The Sectoral Gaps in Afghanistan

9. The Enabling Investment Climate:
Address Gaps and Build Adsorptive Capacity
Inputs
Outputs
Outcomes
Private and public infrastructure (PPI)
Mobilize infrastructure investments
PPI dialogue and options analysis
FDI into PPI shared-use infrastructure
Open access to infrastructure
Improved access to regional trade / transshipment opportunities
Strengthening of laws, policies & regulatory oversight
“Good fit”
Legal & regulatory oversight
Improved land / title verification processes
ROW , resettlement and compensation processes
Security of Tenure
Vibrant commercial enterprises
Improved land-acquisition

10. The Enabling Investment Climate:
Address Gaps and Build Adsorptive Capacity
Inputs
Outputs
Outcomes
Risk mitigation instruments covering land reform and regulatory oversight
Financial risk instruments in place
Improved financial market perspective on government obligations
Strengthen regional trade and commerce
Options analysis on prioritized regional interconnects
Early regional trade / transshipment agreements

11. The Enabling Investment Climate:
Address Gaps and Build Adsorptive Capacity
Inputs
Outputs
Outcomes
Public financial management of EI revenues (PFM)
Revenues Transparency
Macro-fiscal rules, revenue sharing arrangements
Dedicated expenditure arrangements
Transparency anti-corruption processes and institutions
Local benefits sharing
Rational expenditures
Building adsorptive capacity to integrate public and private sector investment / development plans
Technical studies
Integrated public and private development plans
Leveraging of private sector investments to complement public investments

12. The Enabling Investment Climate:
Address Gaps and Build Adsorptive Capacity
Inputs
Outputs
Outcomes
Building enterprise development capacity for (jobs) around competitive industries
Skilled local labour for direct / indirect jobs
SME’s cluster-industries
Economic growth through direct / indirect linkages
Beginning of economic diversification through clusters
Strengthening social mobilization for improved service delivery
Demand-side monitoring of service delivery, improved consultation , and grievance mechanisms around the sector
Empowerment of the demand-side on service delivery
Improved HDI’s around sector operations

13. View Sector Investments within Integrated Corridors
Amu Darya Basin(2011)
Dushi Gold
(2010)
Hajigak
Iron Ore
(2011)
Aynak Copper (2010)

14. Inclusive Growth Corridors
Map Legend
Input: Power or water
Economic diversification, clusters
Mine
Zone of Economic / cultural impact
Year
Output Infrastructure 2 4 6 8 10 12 14 16
World Bank Group

15. Summary collect & dissemination of geodata
implement “good fit” laws and regulations
Strengthen institutions and adsorptive capacity
focus enabling investment drivers:
open access, public private infrastructure
gaining right-of-way
structuring risk mitigation instruments
strengthen regional trade and commerce interconnects
Public financial management of EI revenues (PFM)
Building adsorptive capacity to integrate public and private sector investment / development plans
Building enterprise development capacity for (jobs) around competitive industries
Strengthening social mobilization for improved service delivery
government takes a resource corridor approach
inclusive integrated growth

16. Michael Stanley, Mining Lead
Thank You
Michael Stanley, Mining Lead
World Bank Group
Washington, D.C.

17. What Can Be Achieved In the 10 Years
Mines -- Two major industrial mines in operation (Aynak and Hajigak); one or more hydrocarbon blocks producing, smaller scale industrial mines in gold, lithium, other metallic minerals; 200+ licensed quarry operations, gemstones, and other artisanal production.
Infrastructure -- Major transportation (rail), power and water infrastructure investments in “corridors” to support mining investment; “spin-offs” in terms of local economic development.
Governance – EITI, transparent non-discretionary sector administration, central government control over “illicit” mining and regularization of artisanal miners;
Support – Provision of geodata, sector promotion, and resource corridor support through Government partnerships: ADB, World Bank, USAID, UKDFID, AUS AID and others.