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Special Defense Department Briefing from the Pentagon Arlington, Virginia

Presenters: Paul Brinkley, Director, DoD Task Force for Business and Stability Operations in Afghanistan; Jack Medlin, Regional Specialist, U.S. Geological Survey International Programs; Kathleen Johnson, Mineral Program Coordinator, USGS
June 14, 2010

        Go to http://www.defense.gov/news/d2010614slides.pdf to view briefing slides associated with this transcript.

           (Note:  The briefers appear via teleconference.) 

         COL. DAVID LAPAN (USMC, director, Directorate for Press Operations, Office of the Secretary of Defense):   All right.

         Mr. Brinkley, this is Colonel Dave Lapan at the Pentagon.  How do you hear me?    

         MR. BRINKLEY:  You're coming through, five by five. 

         COL. LAPAN:  Great.   

         And our colleagues over at the U.S. Geological Survey, are you on as well? 

         MS. JOHNSON:  We are here. 

         COL. LAPAN:  Okay.  Thank you.  

         Good afternoon, all.  Thanks for coming at this sort of hastily put-together press briefing.  This is an on-the-record briefing.  The individuals that you'll be hearing from today are Paul Brinkley, who is the director of the Task Force for Business and Stability Operations; Jack Medlin, who is with the U.S. Geological Survey International Programs, a scientist; and Kathleen Johnson, also with USGS, in the Mineral -- Minerals Program.  She's the coordinator.  

         And again, Mr. Brinkley, I know it's late where you are.  So thank you for joining us.  And if you'd like to, make a few opening remarks, and then we'll open it to questions. 

         MR. BRINKLEY:  Thank you, Colonel.  I appreciate it.  And it is late, so we'll -- I'm very pleased to be here with my colleagues from the USGS. 

         A little bit of background before, very briefly, we open up to questions.  A little over a year ago, we were asked by the command and the Office of the Secretary, in collaboration with the U.S. embassy in Kabul, to begin assisting in an economic assessment of the state of Afghans' economy.  And the focus of that assessment was to assess the ability, or the long-term viability, of the Afghan economy.  Well- publicized challenges there in terms of the Afghans being able to finance their own security, their own development.  Obviously, the international community has stepped up in a tremendous way over the past several years, to provide everything from the security costs, but also just the base developmental costs associated with helping that war-torn country get back on its feet. 

         We began that work last summer.  It continued through the fall. And as a part of that work, we began a partnership with the U.S. Geological Survey and, as a by-product of that partnership, became familiar with and then became actively involved with a(n) effort to understand the potential of the mineral wealth of Afghanistan and the challenges, which are many, to the Afghans in developing that resource in a socially and environmentally responsible way, but that would lead to economic sovereignty for the people of Afghanistan to give them the ability to pay for their own development and to pay for their own security, and to enable the eventual reduction of all of the investment the international community is making, but most importantly, the investment of the blood of our young men and women that is sacrificed there every day in an effort to secure the future of the Afghan people. 

             And so that's where we are today.  We've begun an active effort with the U.S. Geological Survey to fine-tune, understand, and to communicate and facilitate effective, socially and economically and environmentally responsible development of this mineral resource to support the economic -- (coughs) -- excuse me -- the economic sovereignty of Afghanistan. 

         And with that, Jack, do you have any opening comments you'd like to make? 

         MR. MEDLIN:  Well, the USGS's role in this from the very beginning has been basically from the science and technical aspects of it.  And it's been carried out basically in partnership with the Afghan Ministry of Mines and the Afghan Geological Survey, with whom we've been working -- with, I guess, for the last five years or so. 

         So that's my opening comments. 

         MR. BRINKLEY:  So with that, Colonel, I think we're open to any questions. 

         COL. LAPAN:  Anne? 

         Q     Sir, this is Anne Flaherty with Associated Press.  I was looking at your briefing, which notes that about 70 percent of the mineral wealth is unrealized or untapped.  Could you describe where a lot of these areas are found?  It does look like quite a bit would be in areas that are controlled by the Taliban, for example Kandahar. Could you talk about that, and also some of the challenges in how you actually get the minerals out of the ground and to the point where it benefits the Afghan government? 

         MR. BRINKLEY:  Jack, you want to take that one? 

         MR. MEDLIN:  The mineral resources of Afghanistan are basically scattered all over the country.  They're in the northern, the eastern, the western and the southern part of the country.  And the way we view our responsibility is to try working with the Afghans to identify those places that we believe have high potential for future development with additional work. 

        We view -- basically, once we work with them to identify the places and we gather the scientific and technical data necessary for development, then that work, then, is handed off to the Afghan government and the Afghan people basically to develop those resources in an environmentally sound way.  So we don't actually get into the development part of it.  We are a science organization that basically provides the basic data and information that provides or can provide for further development.  

         But -- and getting back more specifically to your question, the mineral resources that have a high potential are, based upon our work -- previously work basically in the country, supported by USAID, indicates that those mineral resources are scattered -- or the high- potential ones are scattered around the country. 

         COL. LAPAN:  Courtney. 

         Q     Hi.  This is Courtney Kube from NBC News.  Can you give us sort of a reality check of the timeline on when we'll see any real excavation or any real product from all these minerals in Afghanistan that could have -- actually help Afghanistan's economy?   

         And then, also talk a little bit about the U.S. government's confidence in the Bureau of Minerals in Afghanistan and the potential for corruption, if in fact these minerals begin to be excavated and the economy starts to see a growth in product and output. 

         MR. BRINKLEY:  Yes.  I think it's very important for everybody to recognize that between here and an economically sovereign, sustainable Afghan economy that uses or that has the use of its own mineral wealth, among other economic sectors, is not a quick win. 

             I mean, this will take time.  And it goes to infrastructure, it goes to process within the government, it goes to some of the points that you just made in your question in terms of transparency, environmental practices.  These are all things that must be in place.   

         So I would describe where we are today is the rapid development of an understanding.  And I'll be honest with you, when I first visited Afghanistan I did not anticipate there being wealth opportunity there that would enable this kind of development to take place in any term in Afghanistan. 

         So I would say that where the Afghans are now is there's been scientific work -- it's not that new, as Jack indicated, but an understanding of what it means economically and in the world given the demand for some of the mineral wealth that Afghanistan possesses, how it enables Afghanistan to begin the march toward its own economically sovereign capability to finance its own human and security needs, that is the path that I think is beginning now.  But there's a lot of work that has to take place. 

         Now, specific to how quickly something could happen, we are working with the Afghan geological survey, with our colleagues at USGS, to identify -- because there are some mineral deposits that are not as capital intensive to development as something like copper or iron ore, things that will require rail infrastructure and large-scale investments of capital. 

         There are some that don't require this.  And I think it's important, and we hope to in the next period of time, near-term period of time -- we'll just leave it at that -- to work with the Afghans to facilitate transparent, anti-corrupt transactions for some of these mineral deposits that can be developed sooner, to help exercise the legal framework, to help exercise the structures that need to be put in place and then scaled so that the concerns everyone has about what this means -- what would it mean to have Afghanistan with an indigenous source of wealth -- that those concerns can be addressed, and that the way to do that, we believe, is to exercise them via transactions.   

         Q     (Off mike) -- confidence in the bureau of minerals right now?   

         MR. BRINKLEY:  (Inaudible.)  I'm sorry, back to that point.   

         I mean, it's an interesting dilemma, because the bureau of minerals has now developed a detailed level of understanding of just how large the scale of the wealth that they possess is.  But they've never had to deal with this before.    

         And so the concerns that everyone has, and they're not just obviously transparency and accountability within the ministry but also just the ability to handle the volume of transactions that may emerge -- you're building a ministry, rebuilding from the ground up.   

         I would emphasize, there is a base of technical knowledge.  And I'll ask Jack to comment.  The base of technical knowledge within the Afghan geological survey is present and is -- Jack, I don't know if you want to add any color to that.   

         MR. MEDLIN:  Yes.  

         We've found basically working with the Afghan geologists and engineers over the past five years that they produce quality work. And we have a very close working relationship with them, in gathering new data and information.  

         And as a result of the interactions over the last five years, with some training on our part, we found that they can and do produce quality work with us.  And that's basically gathering data and information.   

         I would like -- I want to go back and return to a point on the development aspect.  I think as most people know, the Chinese won or were given a lease two years ago to begin basically the development of a world-class copper deposit called the Aynak copper deposit, which is a little bit south, 20-25 miles south of Kabul.   

        So there is beginning of development of a mineral culture and the mineral deposits in the country, even as we speak. 

         COL. LAPAN:  Justin. 

         Q     Well, we started to talk about this.  It's Justin Fishel, from Fox. 

         What type of mining infrastructure or capability exists now?  To what scale can Afghanistan produce these elements and dig them up? And how do you go about awarding contracts, when you're going to have all these new bids coming in for these -- for these minerals?  And do we foresee U.S. companies being involved at all in that process? 

         MR. BRINKLEY:  So, I'll take the bulk of the question, and then defer to Jack on a couple of sidebars on the current state. 

         But I would generally characterize the state of mining in Afghanistan today as artisanal mining -- so, mining involving wheelbarrows, shovels; low-scale, non-industrial mining.  There's some -- there's some larger-scale marble-cutting or travertine-cutting operations that exist in the west and part of the south of the country.  But generally, the mining industry as an industrial enterprise has not been developed in Afghanistan. 

         The one noted exception is the Aynak deposit that Jack mentioned, which has now been leased for development to the Chinese.  And I'll emphasize that's one among as many as four world-class copper deposits that appear to exist in Afghanistan. 

         In terms of how the tendering -- the process that the Ministry of Mines, Minister Sharani, has put forward -- he's new; just assigned to the role.  We have worked with him to embed international accounting firms in the ministry, to help create auditable, transparent processes, so that as the technical details and the technical work is completed -- surveying sites; taking core samples; validating, in partnership with the USGS, the actual -- with the Afghan Geological Survey -- the actual technical quality of the deposits -- that, you know, we hope that as early as late this year, there will begin to be tenders offered for public bid, at which time American companies, international companies, anyone interested will be able to bid on these processes. 

         And what's important then is, we want those companies to know that there will be internationally acceptable, transparent accounting practices used within the ministry to ensure that anyone bidding can have confidence that the bid process is sound and auditable and transparent. 

         Jack, I don't know if you want to add any color on the issue of the artisanal mining or the copper. 

         MR. MEDLIN:  No, I think you've covered it.  I think there's been -- I can maybe comment a little bit on the artisanal.  Artisanal mining in that country has gone back centuries, mostly focused on things like gold, what we call placer gold, in various places.  But the country -- what it faces going forward is developing a mining culture basically at a -- at a very large mine scale.  And I guess I fully believe that the Afghans are fully capable of handling that, given some time to develop the expertise. 

         MR. BRINKLEY:  The only other thing I'd like to add to the point about the ministry is, this is, you know, a true multidisciplinary, intergovernmental effort.  The State Department, U.S. Agency for International Development, ourselves, USGS are working in concert -- and I would also emphasize the World Bank -- to develop -- if you think about all the tiers of structure that have to exist, from legal framework all the way to transactional transparency and accountability, that's a lot of pieces.  And there is a multi-front effort here led in Afghanistan as part of the overall economic development plan in the embassy to ensure that, as best we can, we equip the Afghans with as much expertise as possible to ensure -- and I come back to -- a socially and economically and environmentally responsible development of these resources. 

         Q     You said that there have been surveys before.  So tell us exactly what's new here.  To what extent are you reinventing the wheel or are you doing something new other than putting a dollar figure on the resources?  

         MR. BRINKLEY:  You know, Jack, you're the one who's been involved since early on.  I think I'll leave it to you in terms of describing maybe what's different in the approach that's being taken today. 

         MR. MEDLIN:  Basically what's different is that when we first started in Afghanistan looking at the mineral resource potential in 2004, we were presented with one of many maps which showed literally hundreds of what we called mineral localities in Afghanistan, but they're all widely scattered around the country, and no one basically had tried to apply some sort of a comprehensive assessment methodology or model to those.  

         And so at the beginning, basically what we did was we went in and began to examine all of the existing data and information that was available in the country, most of which basically was derived by the former Soviet Union geologists and engineers in the '80s.   

         And what we discovered was an immense amount of data and information about these various mineral locations. 

        And what we did was that we compiled that data and information and began to integrate the geologic, the geochemical and geophysical information that had been produced by the Soviets.  And then USGS basically has a methodology in which we -- that we use basically to make an assessment of -- or we try to make an assessment of those areas -- not mineral location -- locales -- but those areas which show the greatest potential.  And that's based upon the voluminous data that the Soviets left behind.  And out of that methodology or exercise came the identification of 24 or 25 areas that we felt showed the highest potential or the greatest potential for mineral development.   

         Now, what we've tried to do is to follow on to verify the existing data and information that we found in the archives of the Afghan Geological Survey.  We need to verify some of the data and information in order to make it a bit more attractive to international investors. 

         MR. BRINKLEY:  So to add to that, I mean, I think programmatically, if I think about the difference -- if there is a difference, I mean, that's transpiring today -- there's a full-breadth effort to not just take -- and the USGS has been working on this scientifically for a while -- but to help equip the Afghans with the necessary tools to facilitate as rapid as possible the commercial development of this in an effort to create -- and again, I come back to an economically sovereign, stable situation for them where they have an indigenous source of revenue -- and getting them to understand and I think getting the community to understand that this wealth has the potential to enable them to have a future they were not aware of. 

        I think that is a difference in approach.  And so looking at commercially what's necessary to make this happen, understanding the economic value of these deposits and communicating clearly within and putting in place the resources to help facilitate transparent and auditable transaction management is something that is, again, in partnership with USGS, we've now undertaken aggressively. 

         COL. LAPAN:  Mike, then Dan, and Tony. 

         Q     Hi there.  It's Mike Mount from CNN.  We've seen that Afghanistan has been called the Saudi Arabia of lithium.  Can you tell us -- and the slides that we saw didn't actually list lithium in there, but can you tell us about how much is there and the estimated cost on that and, I guess, the time when you think Afghanistan might start being able to tap into that resource? 

         MR. BRINKLEY:  Jack, I'll take a stab and then I'll ask your -- to comment.  

         Lithium isn't in the table, because at the time -- the table represents things that are fairly known or good estimates exist.  The surveys of the potential lithium sites in the country are under way and are highly positive, very indicative of potential industrial-scale lithium deposits.  But they're not ready to measure in terms of cost value yet, which is why they're not included in that table. 

         Jack, you want to add color to that? 

         MR. MEDLIN:  Well, I -- the only thing I would add is that there is an ongoing, continuing effort to basically visit the basically dry lake beds and to collect samples from those and to basically get those samples analyzed to determine basically the lithium or potential lithium in those dry lake beds. 

             So it's -- at this point in time, there is -- there has been no assessment of the lithium resource, but we know that, basically, lithium does occur in a number of those old dry lake beds.   

         Q     This is Joe Tabet, with al Hurra.  My question is based upon this assessment, do you think – [are] there any potential oil resources or natural gas resources? 

         MR. BRINKLEY:  The table that you were provided in the briefings indicate the known reserves for both natural gas and oil which, to date, have not been developed.  Those are not included in that table as a separate number, I mean, but there is a table there that estimates their value as of last, I believe, December.   

         The -- so, you know, I mean, I believe the numbers are a billion-and-a-half of reserve petroleum -- or of oil.  That is an element of the overall effort with the Minister of Mines to identify -- there's ample demand within Afghanistan for petrochemical resources.  We believe the development of that resource is -- it's certainly not a -- now, those level of reserves do not create an export situation necessarily for Afghanistan, but there's certainly value in that. And, Jack, I don't know if you'd like to add on the hydrocarbon sector. 

         MR. MEDLIN:  USGS released an oil and gas resource assessment in March of 2006.  I think that maybe some of you have visited the USGS Afghan website where the results of our assessment are posted.  That assessment basically showed that there were probably three times more natural gas resources than had previously been estimated.  

        And I think it was around 15 or 18 times more oil than had been previously estimated.   

         So the natural gas resources were started.  The development of them was started basically in the late-1950s by the Soviets.  And they continued to develop the natural gas resources up near Sheberghan. And those wells actually were in production until the Soviets left in the late-'80s.   

         And over the years, because of lack of replacement parts and service and so forth, the wells basically started gradually being shut in or losing production.  So there is known oil and gas resources in the northern part of the country. 

         Q     Could -- just want to make sure I understand.  So the figure of nearly $1 trillion (dollars), over $900 billion (dollars), that estimate does not include lithium.  And then I have another question after that.   

         MR. BRINKLEY:  That's correct.  That estimate only includes I believe, and again I think it's $900 billion (dollars) based on math that was done in December of last year, at whatever the commodity prices were at that time -- it does not include lithium nor does it include oil and gas.   

         Q     And then once again if I could just ask in layman's terms, what did this follow-up survey last year uncover or clarify compared to the previous survey you did in 2007?  I apologize if this sounds like you've already covered this.  

         MR. BRINKLEY:  Jack, I don't know if you want to talk about the -- I mean -- I'll offer some explanation.  The work that is under way, the identification based on economic criteria of the top 24 potentially valuable sites in the country, the field surveys to gather samples, core samples from this information to take and do laboratory work and analyze and verify the value, that work is what has been launched since last summer.  And that work is beginning to deliver the detailed results, some of which you see in the package you have today. 

         That is new and different, the field work to gather that data. The survey work Jack is describing is thermal geomagnetic and spectral imaging work that was done -- and Jack, if you want to add color to that -- that dated back to 2004 to help build a database of where to look.   

         In other words, the overhead survey work combined with Soviet data gave an indication as to where valuable deposits may be.  But you can't ask a company or international -- or anyone to really invest in something that hasn't been sampled physically, data gathered, which that's the work now under way with the Afghan geological survey -- validation of the quality of the ore, its potential economic value.   

         That's a necessary piece of work that we now have under way in partnership with USGS to take us to the next step, which would be enabling the international community to understand the economic viability of developing this resource.  And so that is a -- hopefully, that distinguishes. 

         Jack, do you have anything to add to that? 

         MR. MEDLIN:  Well, the only thing I would add is that what we're trying to do is to verify, basically, the existing data, and for the most part that's Soviet data.  So that's the important thing that we're trying to do at the moment.  In 2006 and 2007, we started basically gathering new data and information. 

        One piece of it basically was what we call airborne geophysics, and that's gravity and magnetics, which we flew over 75 percent of the country, which allows us to see the third dimension, the subsurface, in a lot of the areas within the country, which gives us -- gives us a better understanding, basically, of things like shape and size and depth and so forth, of the potential mineral deposits. 

         The second thing we did, basically, in August through October of 2007 was to fly about 90 percent of the country using a new sensor or instrument to gather what we call high-prospectural data, which provides us with data and information of mineral occurrences at the surface, including data and information in the 24 boxes that were identified from the initial assessment using the Soviet data. 

         So we were trying to use the combination of information that existed, mostly Soviet, plus the new data and information that we're trying to gather through either satellite imagery or through airborne geophysics, or through basically working with the Afghans to sample certain areas as part of the verification process, we call it. 

         Q     Paul, Tony Capaccio with Bloomberg.  To what extent does this $1 trillion figure underestimate the potential long-term value of the natural resources?   

        You touched on the fact that lithium is not part of it.  But to what extent does this truly underestimate what's out there?  I mean, the USGS implies that this figure represents about 30 percent of known resources.  Is that true? 

         MR. BRINKLEY:  Well, you know -- and this is frustrating, because if you look at the table, the table actually wasn't designed to be a trillion dollars -- I mean, it actually has a list of value by mineral category.  And I think it sums up to like $900 billion (dollars), which gets rounded up because it's an easy number.  And that's fine. 

         Is that a conservative number?  Is it not?  You know -- and it doesn't include oil and gas, and it doesn't include things like lithium and other deposits which are not -- which have not reached a level of technical certainty.  But the most important thing to us is the technical sanctity that the United States Geological Survey brings to this -- that you don't project off of things that aren't a pretty high degree of scientific certainty, which gets to things like lithium and others. 

         I think where we're looking at it, if I -- if I step above it, whether it's a trillion dollars; a lot of people think that's a conservative number -- but I think, as a number, given the discussions about Afghanistan -- I mean, this is a country that has an $800-million annual budget, that depends upon the international community for the vast majority of the cost of its security, its development.   

         And so what's relevant about the number, whether it's conservative, whether it's half-a-trillion (dollars), whether it's two trillion (dollars), three (trillion dollars), whatever the number is, the Afghan people developing and understanding that they have a source of indigenous wealth that properly developed will enable them to be sovereign, to make economically sovereign decisions, to understand and be able to finance their own security and their own living, and to see a path to that -- which to most Afghans, frankly, they've never imagined.  The people who, you know, who've lived through the past 30 years, that's never been a possibility for Afghanistan.   

         And so, we don't really dwell a lot on that number other than to note, boy, that's a really big number. 

        Whether it's a conservative number or a liberal number in terms of the size of it, it's not a -- it's not a -- that's not -- that's not where our focus is.  Our focus is, we've identified 20 sites that are worth a lot of money, that will generate enough revenue for the Afghans to pay for their own way.  And that's the emphasis we're trying to place on this. 

         Q     (Off Mike) -- Afghanistan almost 100-percent dependent on U.S. or foreign investment to tap into and actualize this great, untapped potential mineral wealth -- 

         MR. BRINKLEY:  (Off Mike) -- folks who have looked at this, also.  I mean, the -- outside of -- I think that the thing I would emphasize is, the mining industry, if they -- if they know there's a deposit that has value, and the -- you know, the scientific part of this work is completed, the kind of work that Jack was talking about, the international mining industry makes large-scale capital investments in places where they have certainty that -- the issues we all are concerned about:  security, transparency, relative stability. When those things are addressed, you can count on private industry to make investments to help develop these resources, because they generate a high return for the companies and, done appropriately, generate a great return for the country involved. 

         There are many case studies around the world where this works, and there's case studies where, you know, you don't want to replicate where the mining industry does work.  And so, I think, again, I come back to environmentally and socially responsible development, focused on ensuring a revenue stream for the Afghan government. 

         And the international community today is spending billions of dollars in Afghanistan.  Seeing that investment, the small amount that we're investing to help develop their capacity to develop this resource, I think has a high return -- a high potential return -- on investment for the international community. 

         COL. LAPAN:  One last question, anyone? 

         (Pause.) 

         All right.  Mr. Brinkley or Mr. Medlin, any closing comments you'd like to make? 

         MR. BRINKLEY:  No, I just want to put another plug in for my colleagues at USGS.  They've been fantastic to work with.  Anyone who ever wants to see some remarkable science, Reston, Virginia, is a wonderful place to visit, and I thank Jack and the guys for all their sacrifice. 

         They've also, I want to emphasize, as part of our team, gone into very remote and difficult areas with us to do -- in partnership with the Afghan Geological Survey, to do the kind of work we're describing here.  And that speaks to the -- both the caliber of the science but also the courage they've demonstrated in stepping forward to help the Afghan people develop the resource.  So I thank them very much. 

         With that, I'm done. 

         COL. LAPAN:  Mr. Brinkley, again, thank you for putting in some extra hours to be with us this afternoon. 

         And to our friends at USGS, thank you for joining us this afternoon.  

         MR. MEDLIN:  Thank you.  

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