Afghanistan publishes mining revenues and contracts

Revenues are still low, but expected to grow fast. Over 200 contracts disclosed.

Afghanistan EITI published its latest EITI Report on 13 October, disclosing taxes paid by mining companies to the government in Solar Hijri calendar year 1389 (the period 21 March 2010 to 20 March 2011). This second EITI report shows that government revenues from mining are still low, at less than US$ 1 per capita for that year.

Large fluctuations in revenues, yet set to grow exponentially

The EITI Report discloses figures on company tax payments and government revenues broken down by company, recipient agency and payment type. It records total revenues of Afs 1.07 billion (US$ 23.4 million). This is up 200% from the previous year, mostly attributable to increased coal production from the state-owned Northern Coal Enterprise. In 1387 (2008/9) revenues peaked at Afs 4.5 billion (US$ 89.6 million), due to signatures bonuses related to the Aynak Copper Mining project.

The most recent report reveals a significant number of discrepancies. Some of these have been quickly clarified, but others require further investigation. The independent administrator of the EITI Report also included a number of recommendations for strengthening the process, including that the government ‘utilises its regulatory powers to make it compulsory that all the extractive companies report according to the EITI Criteria’ to ensure that all companies participate and material payments and revenues are covered.

Although the 2010/11 figures are small, Afghanistan is expected increase in revenues in the coming years as several large projects begin production.

Contract transparency

With the expected increase of revenues, it is significant that the government has committed to publish all mining, oil and gas contracts.

In recent weeks, over 200 contracts have been published, including the Amu Darya oil, the Qara Zaghan gold and the West Garmak coal contracts. This does not yet include the contract relating to the Aynak copper mine. Another large contract is expected to be signed shortly in relation to the huge Hajigak iron ore project. Civil society groups have welcomed these steps towards greater transparency.

Afghanistan is expected to commence EITI Validation shortly. 

With this formal launch of the EITI Report and debate on local television regarding the discrepancies identified in the report, Afghanistan EITI has begun a communications programme to raise awareness and dialogue about how much the country receives from its natural resources.

For further information, please contact Sam Bartlett: sbartlett@eiti.org