Evaluation of the Obstacles to Developing the Aynak Copper Mine in Afghanistan

Abstract

The Aynak Copper Mine was first discovered in 1973, and mining was initiated by the Metallurgical Company of China in 2009. However, its use has been suspended several times and the mine has never been fully exploited due to political unrest and terrorism, among other issues, in Afghanistan. Afghanistan has been recognized as one of the most fragile, conflict-affected, and landlocked countries in the world by international organizations and the global community, especially after the events of 9/11. Hence, understanding the obstacles influencing the development process of the Aynak Copper Mine is of crucial value in sustaining the development of the overall economy and society in Afghanistan. The aim of this paper is to explore the factors that have caused suspensions of the developments of the Aynak Copper Mine, which may apply to other developing projects in Afghanistan and in other fragile states. The findings will provide a better understanding of the difficulties in maintaining a sustainable environment for developing the regional economy in Afghanistan, and fill a gap in the literature with regards to the applied and theoretical economic growth model in fragile states. The materials of this research are partly based on a radical analysis of the official documents of the Afghan government and international organizations. We adopted statistical analysis to identify the factors associated with the progressive process of developing the Aynak Copper Mine, and an ordinal logit regression to analyze those factors. We specifically considered the factors associated with the degree of administrative capacity, labor investment, labor productivity, capital investment, efficiency of capital, terroristic activities, and religious issues. Among these factors, the relationships between the degree of administrative capacity, terroristic activities, and religious issues were strongly associated with the development status of the Aynak Copper Mine. The other investigated factors were not found to be relevant. This study is among the first on the Mining Project in Afghanistan.

1. Introduction

Afghanistan is not only one of the most fragile and conflict-afflicted states in the world, but is also a country that seeks economic cooperation facilitated through political trust, economic integration, business collaboration, and cultural and humanistic communication [1]. In the past decade, more than 3200 commercial initiatives have been constructed [2]. This is in accordance with the tendency toward globalization, which facilitates an international community that coordinates well with the interests of sustainable development. The Aynak Copper Mine is an infrastructure project that promotes the development of the Afghan economy. This mine contains the second largest copper resource in the world. It is 19 miles away from the city of Kabul, and was discovered by former Soviet geologists in the 1960s [3].

From 1974 to 1978, former Soviet geologists prospected the mining area and then submitted the “Geological Prospecting Reports of Central Section at Aynak Copper Mine” and the “Reconnaissance Report of Deposit in the Western Section of Aynak Copper Mine” to the Ministry of Geology, Soviet Union. From 1979 to 1988, the Soviet geologists began tentative development in the Aynak Copper Mine. In 1989, the development of the Aynak Copper Mine was suspended as the Soviet Union withdrew from Afghanistan. Due to years of civil war in Afghanistan, official mining was never undertaken [4]. In November 2007, the China Metallurgical Group Corporation (MCC) won the right to mine its deposits for 30 years, and the contract was signed by the Afghan Government and the China Metallurgical Group Corporation in May 2008 [5]. On 9 July 2009, the Aynak Copper Mine was reopened. The construction period of the project was five years, and included the building of a 400 Million Watt (MW) heat-engine plant, a water pumping station, and a phosphate fertilizer factory, as well as public services such as schools, hospitals, railways, and mosques [6]. The total investment in the mine exceeds 10 billion US dollars [5,7].

According to the contract between the Afghan Government and the MCC, the Aynak Copper Mine should produce approximately 200,000 tons of copper annually, at a concentration of 2.3% compared to the 1.6% industry standard. It should take seven years to reach maximum production. The first production of 25,000 tons of copper was expected in 2015 [5], however, it was delayed due to unpredictable issues in Afghanistan. First, the inefficient transport system could not support the improved performance of production at the Aynak Copper Mine. Transport to and from the mine relies on road traffic, which remains cost-prohibitive, until the completion of the construction of a railway [8]. Second, the progressive construction process has often been delayed due to the political unrest in Afghan society. For instance, in November 2012, the Aynak Copper Mine and its Chinese workers were attacked by militants [9,10]. Third, the Aynak Copper Mine is located in a Buddhist archeological site. In July 2015, the local people petitioned the Afghan Government to protect the historical and religious area. Moreover, archeological Non-Governmental Organizations (NGOs) requested an archeological survey before mining could take place [11]. Hence, the construction process of the Aynak Copper Mine was suspended.

Exploring the obstacles to the sustainable development of the Aynak Copper Mine will promote the progress in developing the Afghan economy [12,13]. Many scholars have argued that Afghanistan has been recognized as a typical fragile and conflict-affected state, which may hinder its ongoing development [14,15]. The current studies on the issues of sustainable economic development in Afghanistan show a number of findings. First, the studies are mainly about international collaboration between the Afghan Government and international communities. Some have reviewed the historical concept of the “Ancient Silk Road” and the form of business cooperation among Afghanistan, China, and other countries, and predicted the productivity of the Afghan economy [16,17,18,19]. Other studies have also provided information on the risks and challenges in Afghanistan now, as it remains characterized as one of the most fragile states in the world [7,9,10,20]. A few researchers have offered data on projects in Afghanistan under economic cooperation platforms, such as the Belt and Road Initiative (BRI), which was claimed by Chinese President Xi Jinping in 2013 [21]. The BRI is an idea that was initially developed from the notion of the “Ancient Silk Road”. The Aynak Copper Mine is an economic cooperation project that started development in 2009 and joined the BRI in 2013.

Hence, studies on the development of certain industries, including the mining sector, are still scarce. To fill this literature gap, this paper has two research questions: First, did the Afghan people expect to develop the Aynak Copper mine? Second, what is or are the main factors that have significantly influenced the suspension of the development of the Aynak Copper Mine in Afghanistan? Furthermore, it is crucial that the BRI is assessed by the people and government of the on-Road countries, in particular, fragile states such as Afghanistan should be highlighted and could be key issues that affect further implementation of the BRI.

2. Materials and Methods

2.1. Research Design and Participants

This research was funded by the Humanities and Social Sciences of the Ministry of Education in China, by the “One Belt One Road Initiative and National Strategy among China, Russia and Mongolia” (17JJDGJW006), and was a major project of the social science department at Jilin University (2017XXJD14). In July 2018, we started research by evaluating the factors that led to the suspension of the development of the Aynak Copper Mine in Afghanistan. The authors contacted the Afghan Government, parliament, private sector, civil society, international community, and regional organizations to conduct a survey. A questionnaire known as “An assessment of the influencing factors in developing the Aynak Copper Mine” was designed (see Appendix A). The information collected in the survey included the degree of administrative capacity (DAC), labor investment (LI), labor productivity (LP), capital investment (CI), efficiency of capital (EC), terroristic activities (TAs), religious issues (RIs), and the expectation of developing the Aynak Copper Mine. The survey was administered to 3000 individuals from the aforementioned groups. The distribution of the survey population was random. Those who participated in this survey individually had no conflict of interests with the development of Aynak Copper Mine in Afghanistan. We received 2563 effective responses, resulting in an effective response rate of 85%.

The pie chart below (Figure 1) shows that there were 2563 effective responses out of 3000 questionnaires (85.4%). Participation was voluntary and many of the respondents were enthusiastic in sharing their ideas about the Aynak Copper Mine. Of the effective responses, 17.4% of respondents were from the Afghan Government (n = 446); 10.14% of the total effective responses were from the parliament of Afghanistan (n = 260); 11.31% were from private sectors (n = 290); and 37.34% were from civil society (n = 957). Moreover, 465 effective responses were from the international community (18.14%), and 145 effective responses were from the regional community (5.66%).

2.2. Variable Definitions

As

Table 1. Definition and descriptions of variables included in the surveys (n = 2563). Degree of administrative capacity (DAC), labor investment (LI), labor productivity (LP), capital investment (CI), efficiency of capital (EC), terroristic activities (TAs), religious issues (RIs).

Variable	Measurement	Min.	Max.	Mean	Percentage (N)
DAC	1 = None or few (0–20)	1	5	3.50	2.4% (62)
	2 = Not too much (21–40)				20.4% (524)
	3 = Neutral (41–60)				20.1% (517)
	4 = Partial (61–80)				38.7% (994)
	5 = Very much (81–100)				18.1% (466)
LI	1 = None or few (0–20)	1	5	3.03	15.2% (390)
	2 = Not too much (21–40)				21.9% (561)
	3 = Neutral (41–60)				24.1% (617)
	4 = Partial (61–80)				21.9% (562)
	5 = Very much (81–100)				16.9% (433)
LP	1 = None or few (0–20)	1	5	3.06	14.4% (369)
	2 = Not too much (21–40)				21.3% (547)
	3 = Neutral (41–60)				25.2% (646)
	4 = Partial (61–80)				21.7% (555)
	5 = Very much (81–100)				17.4% (446)
CI	1 = None or few (0–20)	1	5	3.10	12.0% (310)
	2 = Not too much (21–40)				17.4% (446)
	3 = Neutral (41–60)				32.7% (840)
	4 = Partial (61–80)				23.4% (600)
	5 = Very much (81–100)				14.3% (367)
EC	1 = None or few (0–20)	1	5	3.00	16.5% (423)
	2 = Not too much (21–40)				21.8% (561)
	3 = Neutral (41–60)				23.0% (592)
	4 = Partial (61–80)				22.1% (567)
	5 = Very much (81–100)				16.3% (420)
TA	1 = None or few (0–20)	1	5	2.99	12.2% (315)
	2 = Not too much (21–40)				24.6% (632)
	3 = Neutral (41–60)				27.2% (699)
	4 = Partial (61–80)				23.2% (595)
	5 = Very much (81–100)				12.5% (322)
RI	1 = None or few (0–20)	1	5	3.07	7.4% (190)
	2 = Not too much (21–40)				27.3% (702)
	3 = Neutral (41–60)				27.7% (712)
	4 = Partial (61–80)				25.7% (659)
	5 = Very much (81–100)				11.7% (300)
Expectations of developing the Aynak Copper Mine	1 = None or few (0–20)	1	5	3.48	6.2% (160)
	2 = Not too much (21–40)				12.8% (330)
	3 = Neutral (41–60)				22.3% (572)
	4 = Partial (61–80)				43.9% (1126)
	5 = Very much (81–100)				14.6% (375)

shown, we collected data from the six groups of stakeholders and then we placed them into five categories: None or few (0–20), not too much (21–40), neutral (41–60), partial (61–80), and very much (81–100).

Among the 2563 responses related to the DAC, 62 people (2.4%) realized that the Afghan Government has no or few DACs to influence the development process of the Aynak Copper Mine, and 524 (20.4%) considered that there is not too much the DAC of the Afghan Government can do with the development of the Aynak Copper Mine. The attitudes of 517 people (20.2%) were neutral, but 994 people (38.8%) who completed the surveys thought the DAC of the Afghan Government could partially influence the progressive process of developing the Aynak Copper Mine, and 466 people (18.2%) strongly believed that the government could do very much.

Of the responses related to LI, 15.2% (390 people) thought that LI had no or few relationships with the development of the Aynak Copper Mine, and 21.9% (561 people) believed that the LI has only a not too much relationship with developing the Aynak Copper Mine. The answer of 24.1% (617 people) was neutral, 21.9% (562) chose to trust that LI can partially affect the process of developing the Aynak Copper Mine, and the attitudes of 433 people (16.9%) were positive, believing that the LI influences the development of the Aynak Copper Mine very much.

On the survey responses related to LP, the total number that chose none or few was 369 (14.4%). There were 547 people (21.3%) who chose not too much. The number that answered neutral was 646 (25.2%); partial was 555 (21.7%); and very much was 446 (17.4%).

There were 310 people (12.1%) that believed CI has no or few relationships with the development of the Aynak Copper Mine. The attitudes of 446 (17.4%) people reflected not too much; 840 (32.8%) responded neutrally; 600 (23.4%) of a total of 2563 considered that CI works partially in the development of the Aynak Copper Mine; and 367 (14.3%) people thought CI can work effectively in the development of the Aynak Copper Mine.

From the survey of EC, 423 people (16.5%) considered that the EC has no or few relationships with the development of the Aynak Copper Mine; 561 people (21.9%) thought that EI has not too much influence on the Aynak Copper mine; 592 people (23.1%) were neutral; 567 (22.1%) chose to believe that EI has some effect on the development of the Aynak Copper Mine; and the rest, 420 people (16.4%), strongly believe that the EC influences the progressive process of developing the Aynak Copper Mine very much.

From the perspective of TAs, the answer of 315 people (12.3%) was that TAs have no or few relationships with the progressive process of developing the Aynak Copper Mine. The answers of 632 people (24.6%) were not too much; 699 people (27.3%) chose neutral; 23.2% (595 people) answered partial; and the remainder, 12.6% (322 people), chose very much.

A total of 190 (7.4%) respondents considered that religious issues had none or few relationships with the development of the mine; 702 (27.4%) people chose not too much; 712 (27.8%) chose neutral; 659 people (25.7%) chose partial; and 300 people (11.7%) chose very much.

2.3. Variables Analysis

In this research, we adopted descriptive statistics to study the variables. The expectation of the successful development of the Aynak Copper Mine was set as the dependent variable, and perceptions of the degree of administrative capacity, labor investment, labor productivity, capital investment, efficiency of capital, terroristic activities, and issues of religions were characterized as independent variables. The logical relations between the dependent variables and independent variables (n = 2563) were analyzed using ordered logit regression, as the dependent variables were categorized and ordered. All of the statistical analyses were two-tailed and performed using SPSS (17.0 Version SPSS Inc., Chicago, IL, USA) and STATA (14 MAC Version Stata Corp, College Station, TX, USA), and the statistical significance was set to p < 0.05.

3. Results

3.1. Sample Characteristics

As the Figure 2 observed, regarding the expectation of the successful development of the Aynak Copper Mine, 6.3% (160 people) rated it as none or few; 12.9% (330 people) chose not too much; 22.3% (572 people) were neutral; 43.9% (1126 people) rated it as some; and 14.6% (375 people) were very high. The results of the analysis reveal the difference in the distribution of expectations regarding the development the Aynak Copper Mine. In support of the development of the Aynak Copper Mine, we found 58.5% of the effective responses were positive, which is more than the percentage of the neutral attitude (22.3%) and the negative attitude to developing the Aynak Copper Mine, combined.

3.2. Results Analysis

Table 2. Coefficient of ordered logistic regression (n = 2563).

Variables	Expectation (None or Few)	Expectation (Not too much)	Expectation (Neutral)	Expectation (Some)	Expectation (Very High)	Coefficient (S.E.)	p-Value	95% CI
								Max	Min
DAC
(0–20)	12	18	18	10	4	−4.053 (0.276)	0.000	−4.593	−3.512
(21–40)	55	146	209	93	21	−3.274 (0.146)	0.000	−3.560	−2.989
(41–60)	55	61	160	195	46	−1.964 (0.138)	0.000	−2.235	−1.693
(61–80)	22	75	170	557	170	−1.009 (0.118)	0.000	−1.240	−0.778
(81–100)	16	30	15	271	134
LI
(0–20)	12	48	80	193	57	0.146 (0.143)	0.651	−0.134	0.426
(21–40)	22	75	129	252	83	−0.030 (0.130)	0.461	−0.285	0.225
(41–60)	42	81	148	261	85	0.016 (0.129)	0.702	−0.238	0.269
(61–80)	31	89	133	232	77	−0.105 (0.134)	0.172	−0.367	0.157
(81–100)	53	37	82	188	73
LP
(0–20)	21	34	91	184	39	0.112 (0.140)	0.497	−0.162	0.386
(21–40)	32	72	128	244	71	−0.143 (0.133)	0.086	−0.404	0.118
(41–60)	48	101	140	263	94	0.075 (0.129)	0.165	−0.177	0.327
(61–80)	32	68	104	243	108	−0.150 (0.129)	0.100	−0.403	0.102
(81–100)	27	55	109	192	63
CI
(0–20)	3	29	74	166	38	−0.239 (0.155)	0.122	−0.544	0.066
(21–40)	34	97	117	131	67	−0.224 (0.144)	0.069	−0.506	0.058
(41–60)	60	80	127	440	133	0.108 (0.127)	0.298	−0.141	0.357
(61–80)	45	74	158	236	87	−0.055 (0.131)	0.550	−0.312	0.203
(81–100)	18	50	96	153	50
EC
(0–20)	30	46	129	184	34	−0.126 (0.138)	0.463	−0.396	0.144
(21–40)	28	46	123	262	102	0.217 (0.133)	0.068	−0.044	0.478
(41–60)	44	105	91	227	125	0.133 (0.133)	0.313	−0.127	0.393
(61–80)	32	88	105	262	80	0.117 (0.130)	0.465	−0.138	0.371
(81–100)	26	45	124	191	34
TA
(0–20)	5	12	21	182	95	3.223 (0.172)	0.000	2.885	3.561
(21–40)	55	146	209	93	21	2.724 (0.145)	0.000	2.440	3.007
(41–60)	55	61	160	195	46	2.618 (0.148)	0.000	2.329	2.908
(61–80)	38	111	160	205	81	1.872 (0.144)	0.000	1.590	2.154
(81–100)	73	67	95	77	10
RI
(0–20)	0	16	21	80	73	2.927 (0.195)	0.000	2.544	3.310
(21–40)	24	76	84	353	165	2.512 (0.150)	0.000	2.218	2.806
(41–60)	36	86	143	340	107	1.924 (0.146)	0.000	1.637	2.210
(61–80)	47	89	226	274	23	0.880 (0.147)	0.000	0.592	1.169
(81–100)	53	63	98	79	7
Observations		n = 2563
Df		28

shows the results of the ordered logistic regression analysis, including the standard deviation, coefficient, p-value, and confidence interval. This demonstrates the fundamental characteristics of the distribution of effective responses to the survey, “An assessment of influencing factors in developing the Aynak Copper Mine”. First, we adopted the Model Fitting Information, and the results showed that the significance (Sig.) was 0.000, which indicates the overall significance of the model. Then, we conducted a Test of Parallel Lines. The p-value (Sig.) was 0.586, which is greater than 0.05, thus stratifying the Test of Parallel Lines. This indicates that the parametric estimated value of the ordered logistic regression model is reliable, and reflects the influence of independent variables in the model on the dependent variable.

In Table 2, the parameters are shown. The coefficient values of the degree of administrative capacity, terrorist activities, and religious issues were statistically significant (p < 0.05). In this sense, the relationships between the DAC, TAs, RIs, and the expectation of developing the Aynak Copper Mine are significant. On the other hand, the coefficient values of LI, LP, CI, and EC have no statistical significance (p > 0.05). Thus, the results of Table 2 show that first, the more the administrative capacity is considered to be poor, the less likely the “project” is to succeed in the future. Second, the more serious the terrorism activities in the area are, the less likely the “copper project” is to succeed in the future. However, interestingly, the people who rated TAs from 61 to 80 were more likely than those who rated TAs from 81 to 100 to think that the project would not succeed. Religious issues could also significantly influence the future development of the Aynak Copper Mine, as the mine is located in a religiously significant area.

4. Discussion

This study assessed the degree of administrative capacity, labor investment, labor productivity, capital investment, efficiency of capital, terroristic activities, and issues of religion in relation to the developing process of the Aynak Copper Mine project in Afghanistan. In line with previous research on economic collaboration [2,22,23,24] and Afghanistan [1,25,26,27,28], the major finding of this current research is that the progressive process of developing the Aynak Copper Mine project is strongly associated with the factors of DAC, TAs, and RIs. One of the most significant results showed that a lack of strong administrative capacity may be an obstacle in developing the Aynak Copper Mine. Political unrest may induce a weak administrative capacity in Afghanistan.

Since the invasion of the former Soviet Union, Afghanistan entered an era of ongoing, serious conflict. This phenomenon has allowed powerful international interests to find and train agents to fight for profit in Afghanistan. Due to this agent-based model, the conflicts among these powers have turned into internal hostility and division within Afghan society. Hence, consistent with the progressive process of conflicts among great powers, estrangement and confrontation between tribes, sects, and ethnic groups has been consolidated and strengthened, and social divisions have been enlarged, thus the administrative capacity of the Afghan Government has been further weakened.

According to a previous study [1], our findings explored the phenomenon of weak administrative capacity that appears in fragile states (i.e., Somalia, Chad, Iraq, and Syria). In this paper, we provided a more detailed quantitative examination of the issues that have negatively affected the development of the Aynak Copper Mine, Afghanistan. The results may have important implications, for political elites and policy-makers of the indigenous government and international communities, regarding whether building a strong administrative capacity of the government should be a focus in Afghanistan, in order to support a better investment climate.

The second novel result of this research is that TAs were observed as a significant factor in influencing the development status of the Aynak Copper Mine project. There are numerous existing research papers that have explored the development process of the economy and society, which vary by the terroristic activities that occur in Afghanistan [29,30,31,32]. Our results confirmed and extended the formal studies in this area to show that the development process of international economic collaborative initiatives is often suspended by armed conflicts. For example, there has been ongoing armed conflict in Afghanistan for a long duration.

Even now, a considerable portion of non-governmental armed forces continue to come into direct armed conflict with the Afghan Government. They often attack infrastructure projects, constructive projects, commercial initiatives etc., such as the Aynak Copper Mine. This result has significance in terms of the need to inform investors about protecting their rights and property during the economic collaboration process. Furthermore, this result also alerts the Afghan Government to the need for the facilitation of the proper protection of foreign investment as a strategy for promoting further development of the economy and society in Afghanistan.

This paper also shows that RIs can be an extra factor impacting the progress of developing the Aynak Copper Mine in Afghanistan. Through existing studies, we found that RI are a common theme in Afghanistan history and society [33,34,35,36,37]. Presently, only a few studies have explored whether and how religious issues may collide with new initiatives [38]. On 7 July 2015, The Aynak Copper Mine was suspended due to a petition from the local people that asked the Afghan Government to protect the Buddhist site located under the Aynak Copper Mine project. The suspension requires excavation to be undertaken by the department of cultural relics in Afghanistan, as well as other international organizations. This can be taken as a warning to investors and the Afghan Government as to whether religious issues should be taken into account during the process of considering and attracting investment.

5. Research Limitations and Prospects

This study has several limitations. First, it is based on a quantitative research method. The data were collected through questionnaires from six relevant sectors. We did not distribute the questionnaires to the respondents by number, but rather only by working background. The results from the feedback may not be accurate or fully reflective. Further research is required to consider these issues, and to quantify more factors in order to make the results more precise. Second, the Aynak Copper Mine was combined into the Belt and Road Initiative (BRI), starting from 2013. The BRI is a platform of economic cooperation through political trust, economic integration, business collaboration, and cultural and humanistic communication [1]. Last but not least, the survey respondent perceptions are substituted for objective measures of key factors affecting the mining operation, such as capital investment and worker productivity. This is troubling, as some survey respondents may have limited knowledge of the mine, and even more limited knowledge about the inside factors that affect its development.

6. Conclusions

The aim of this research was to explore the factors that influenced the suspension of the development of the Aynak Copper Mine in Afghanistan. Thus, there were two research questions in this paper: First, did the Afghan people expect to develop the Aynak Copper mine? Second, what are the main factors that significantly influenced the suspension of the development of the Aynak Copper Mine in Afghanistan? To answer the first question, we used descriptive statistics to determine the number of people who expect the continued future development of the Aynak Copper Mine in Afghanistan. The number of views opposing this was 490 out of 2563, as shown in the surveys, thus 1501 people expect the mine’s future development, equating to 58.5%.

To answer research question two, we employed ordered logistic regression to analyze the data that we generated from an administered survey named “An assessment of influencing factors in developing the Aynak Copper Mine”. We observed that the DAC, TAs, and RIs were significantly associated with the issues that influenced the suspension of the development of the Aynak Copper Mine in Afghanistan.

In summary, the findings of this study provide three contributions. First, we explored the expectation rate for developing the Aynak Copper Mine in Afghanistan and found that a majority of the people surveyed expect its future development. Second, we found that the DAC, TAs, and RIs were the primary obstacles to developing the Aynak Copper Mine. Third, we observed analytical and methodological variables that can be used to supervise the further development and construction of the Aynak Copper Mine in Afghanistan.

The success of exploring the obstacles to sustainable development will positively influence the process of integrating Afghanistan into the international community. The rebuilding process in Afghanistan has so far focused upon the degree of international cooperation and the stability that maintains the conditions of economic development. The international community could provide the approach of developments, such as BRI, through economic cooperation. Moreover, Afghanistan has been recognized as a typical fragile and conflict-affected state by the international community. This paper is the first comprehensive study on this topic that has crucial implications for post-war recovery, economic collaboration facilitation, and society rebuilding in a fragile and conflict-affected country such as Afghanistan. It also provides a good foundation of research the difficulties in sustaining the regional economic development in Afghanistan, which will be the goal of future studies.