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Michael Stanley, Mining Lead World Bank Group Washington, D.C. An Enabling Investment Climate: Afghanistan Oil, Gas and Mining What the Sector Can Provide.

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Presentation on theme: "Michael Stanley, Mining Lead World Bank Group Washington, D.C. An Enabling Investment Climate: Afghanistan Oil, Gas and Mining What the Sector Can Provide."— Presentation transcript:

1 Michael Stanley, Mining Lead World Bank Group Washington, D.C. 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

2 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 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 The Enabling Investment Climate: Geodata, Institutions & Adsorptive Capacity 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 5 REGIONAL GEOLOGICAL MAPPING MINERAL RESOURCES ASSESSMENT REGIONAL EXPLORATION ,000,000 >10,000, ,000 USD/km 2 DETAILED EXPLORATION MINE DEVELOPMENT PUBLIC FUNDING PRIVATE FUNDING Aynak Hajigak Sherbegon

6 Good Fit Policy, Legislation, Regulations

7 The Enabling Investment Climate: Strengthen Institutions and Build Adsorptive Capacity Good fit laws and regulations Effective Sector Policy Transparent, non-discretionary licensing / award of contract procedures (first come and tenders) 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 InputsOutputsOutcomes 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 The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity

10 InputsOutputsOutcomes 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 The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity

11 InputsOutputsOutcomes 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 The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity

12 InputsOutputsOutcomes Building enterprise development capacity for (jobs) around competitive industries Skilled local labour for direct / indirect jobs SMEs 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 HDIs around sector operations The Enabling Investment Climate: Address Gaps and Build Adsorptive Capacity

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

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

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

16 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.


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