There's gold in that thar war!
Geologists working with the Pentagon claim to have discovered $1 trillion worth of precious and base metal deposits in Afghanistan.
U.S. and Afghan officials are hopeful that these mineral deposits will convert the war-torn country into a global mining giant, fundamentally altering the economy of Afghanistan and perhaps the war itself.
But there are serious doubts over the logistics of actually mining the metals in the near term.
And for investors, there are much better opportunities in safer, more stable regions of the world.
Mining in Afghanistan
Mineral discoveries in Afghanistan is nothing new. The country has a mining history that can be traced back for over 6,000 years.
Historical mining in Afghanistan was principally focused on the production of gemstones, with some of the world's oldest known mines established to 
produce lapis lazuli for the Egyptian Pharaohs.
More recent exploration in the 1970s resulted in the discovery of significant resources of metallic minerals and non-metallic minerals.
However, no commercial mining activity has recently occurred in Afghanistan, due to the current political and security situation within the country.
But now the American geologists who have uncovered the mineral treasure are saying the recent mineral discovery could change the impoverished nation into a wealthy mining powerhouse — creating job opportunities, alleviating poverty, and uniting the people of Afghanistan.
The new discoveries include large veins of:
- precious metals such as gold and silver
- base metals like copper, iron, lead and zinc
- rare earth elements including beryllium and lithium
Some of these discoveries are believed to be larger than any previously known resources.
In fact one internal Pentagon document described Afghanistan and the new "Saudi Arabia of lithium."
Precious metals in Afghanistan
Small-scale mining of precious metals has taken place in Afghanistan for centuries. Today, there are over 100 known precious metal deposits in the country.
These deposits are principally gold with or without silver and base metals. Only a handful of silver-rich deposits have been discovered to date. But prospective geologic systems exist in certain parts of the country that have the potential to yield silver.
Base metals in Afghanistan
There are around 300 documented copper deposits, occurrences, and showings in Afghanistan
The largest and most well-known copper discovery in Afghanistan is the world-class Aynak deposit. Worked for over 2,000 years, Aynak is what geologists call a sediment-hosted stratiform copper deposit. These types of deposits are some of the richest and largest copper deposits in the world.
Among the best examples of this type of deposits are those of the Zambian Copper Belt, which have to date produced over 1 billion tonnes of copper.
Afghanistan also has very significant iron resources. In Central Afghanistan, the world-class Haji Gak iron deposit is home to over 3 trillion pounds of iron. Haji Gak is one of several iron deposits within Central Afghanistan, but is the largest located to date.
Rare earth elements in Afghanistan
The existence of rare earth elements in Afghanistan has been known since the 1970s. Among the rare earth elements found in the country are beryllium and lithium.
Beryllium's traditional application is in radiation windows for X-ray tubes. However, because the radioactive metal burns cooler and allows more energy to be extracted, beryllium is quickly becoming the most sought after fuel for nuclear power plants.
Wealth Daily's resident alternative energy expert, Jeff Siegel, details the exciting new nuclear applications for beryllium in his latest report, The Most Profitable Nuclear Advancement in 50 Years. Check out Jeff's report right here.
There is only a handful of places in the world to find beryllium. A total of approximately 10 beryllium occurrences have been identified in Afghanistan's Laghman and Nangarhar provinces.
Because of its heat capacity — the highest of all solids — lithium has traditionally been used in coolants for heat transfer applications.
Today, the rare metal is in very high demand for batteries. Lithium batteries find applications in many long-life, critical devices, such as artificial pacemakers and other implantable electronic medical devices.
Small lithium batteries are also very commonly used in portable electronic devices — PDAs, laptops, watches, thermometers, and calculators.
And one of the fastest growing applications for lithium batteries right now is in hybrid electric cars.
In his most recent report for Wealth Daily, my colleague Nick Hodge details the booming market for lithium batteries in hybrid electric cars in his latest report. You can read Nick's report here.
Several lithium occurrences have now been identified in Afghanistan in the Laghman, Nangarhar, Badakhshan, and Uruzgan provinces.
The future of mining in Afghanistan
Officials are hopeful that the mining sector will eventually become the backbone of the now tiny Afghan economy, which is currently dominated by the illicit opium trade.
But while the mineral potential of Afghanistan may seem very optimistic, there are some serious roadblocks that will hinder rapid development...
For one thing, Afghanistan lacks even the most basic infrastructure for mining, such as railroads, electricity, and water pipelines. It will require billions of dollars in investment to build the infrastructure needed to develop and support a mining industry.
Finding this investment will extremely prove difficult — if not impossible — considering security issues and the corruption in the Afghan government.
And much of the mineral wealth found to date are located in or around Taliban strongholds, which could encourage fighting to gain control of the deposits.
Without a dynamic change in security, investors will not be willing to put up the massive capital required to develop and build mines.
And in the near term, it's unlikely that any of these minerals will see the light of day.
Good Investing,
Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire
