Miners hope Afghan law change could spark a modern 'gold rush'

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The Independent Online

Mineral rich, but war-torn Afghanistan is to reform its mining laws in what operators in the country say could spark a "gold rush" in the country.

Afghanistan government leaders hope to improve the nation's dreadful economy by exploiting its vast reserves of copper, gold and iron ore. However, the country has been hampered not just by the war and internal tribal conflicts, but an archaic mining law that has led overseas investors and miners to question the security of their assets.

Under current legislation, any company that explores an area for minerals is not automatically granted an operational licence which is the case in most other parts of the world. Instead, the government offers the licence out to open competition, so an pioneer might have spent tens of millions of dollars in the country only to eventually hand it over to a rival to exploit.

It was hoped President Hamid Karzai's cabinet would ratify a change to this rule over the summer, but Karzai (left) has let the parliament decide on whether to modify the law. A vote, expected by November, is likely to gain a majority.

A source working in the country said: "If the law changes so that companies have security over their exploration assets then we could end up with something of a gold rush. Afghanistan needs a gold rush."