Afghanistan Holds Significant Rare Earth Deposits

Sept. 15, 2011
U.S. to work with Afghan government on developing resources.

Could the search for new sources of rare earth elements lead some companies to Afghanistan? The U.S. Geological Survey said Sept. 14 approximately 1 million metric tons of rare earth element resources exist in Afghanistan's in Helmand Province.

The area contains a major potential source of light rare earth elements, including lanthanum, cerium and neodymium, according to a USGS study funded by the Department of Defense's Task Force for Business and Stability Operations. The USGS compares the find to world-class deposits in the United States and China.

The find could lead to future international investment, said Regina Dubey, TFBSO acting director, in a prepared statement.

"This is just one more piece of evidence that Afghanistan's mineral sector has a bright future," she said. "The international mining community is beginning to realize Afghanistan's extraordinary mineral potential."

The estimated reserves are far smaller than the estimated 36 million tons that exist in China, the world's rare earth leader. But U.S., European and Japanese manufacturers have been searching for new rare earth sources after China began limiting supplies. The materials are used in various high-tech products, including smartphones and hybrid vehicle batteries.

There is international interest in the find, but whether that will lead companies to petition the Afghan government to lease the deposit is unknown, says Jack Medlin, a spokesman with the USGS.

Instability in the region could make it difficult for companies to safely produce rare earth elements, says Arnett Waters, managing member and principal at A.L. Waters Capital LLC in Boston.

"Who is going to invest the time and money into setting up rare earth elements because rare earth elements mining requires a lot of processing and a lot of front-end investment? says Waters, whose firm focuses on rare earth and other element investments. "And a lot of people who are probably not Afghans going into regions where the Afghans might not feel welcome toward them."

Despite the challenges, the United States will continue helping Afghanistan's government develop its rare earth resources through private-sector investment, said Ambassador Marc Grossman, U.S. Special Representative for Afghanistan and Pakistan.

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