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Mining firm evade spending $700,000 in community services

Mining firm evade spending $700,000 in community services

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16 Sep 2021 - 10:31
Mining firm evade spending $700,000 in community services
author avatar
16 Sep 2021 - 10:31

KANDAHAR CITY (Pajhwok): The Amania Mining Company (AMC) has avoided spending $700,000 in community services in the Neash district of southern Kandahar province, Pajhwok Afghan News has reliably learned.

According to the contract, the company excavating fluorite in the area was bound to spend $700,000 in community services for the improvement of the lives of local people.

The contract inked between AMC and the then Ministry of Mining and Petroleum (MoMP) reads that mining company should spend $100 annually on the community services for the residents of Nesh district.

The company, however, claimed providing community services but added insecurity and lack of coordination between them and the ministry hampered the process.

Contract details

Neash district is situation 160 kilometres north of Kandahar City and the fluorite reserve is situated in the Bakhot locality.

Fluorite is used as a flux in the manufacture of open-hearth steel, of aluminum fluoride, of artificial cryolite, and of aluminum.

The excavation process of this mine began back in February, 20, 2013 under contract No. Fl.001 signed between the AMC and the MoMP.

The contract says that AMC will deposit $18 or its exchange rate Afghani to the government per one tonne of fluorite excavation.

Under the community service article 23 of the contract says: “During the contract period the company is bound to carry out social community services — road construction, a 15-classroom school building construction, mosque, bridges, culverts, parks, clinics constructions, organizing tuitions and providing support to less fortunate local persons —- at its expenses.

Kandahar Mining Department view

Eng. Khan Aqa Tarakhel, former head of the Kandahar Mining and Petroleum Department, told Pajhwok Afghan News the fluorite mining contract had been signed between the MoMP and AMC in Kabul but the monitoring of the entire process was carried out by them.

He said the contract was signed back in 2013 with the first phase belonging to the development and exploration of the mining site which was three years and the profit earning period was the second phase that kicked off after three years.

According the contract, the company after its first phase should start spending $100,000 annually on the community development of Nesh district and this process may continue for seven years.

On the basis of contract, the company owed $700,000 to the people of Nesh district in community development services.

He said during the period different official letters were sent to the company and they were asked to provide services to the people of Nesh in line with the contract.

Despite official notices, he said the company did not bother to take step for the community development.

He mentioned an official letter No. 365-362/662-659 dated September 6, 2016 sent to the mining ministry provincial coordination body regarding the negligence of AMC in the fluorite mining contract.

The letter reads, “Amnia Mining Company started mining of the fluorite mine in Nesh district of Kandahar province based on the approved plan in June 2014, the company did not act based on the contract since that date.”

Based on the contract, the company is responsible to spend $100 in community services in the area each year, but it did not do so despite holding out several promises to the governor’s house and the Mines Department.

The letter also includes some other violations of the company and it has asked the concerned department to summon the company officials and talk with them about the mentioned issues.

Former Kandahar mines director said that former deputy governor of Kandahar, Abdul Ali Shamsi, who was killed in a bomb attack, had sent a letter to the provincial police headquarters in 2015 to stop the activities of the company due to its violations, including its non-commitment to work in social services.

The letter which also referred to Kandahar police officials and officials of Nesh district, included that the company should be stopped because it did not provide facilities and failed to do development activities.

However, Tarakhel said that despite all these problems, the company continued its mining activities.

Former sectorial and technical services director of Kandahar, Abdul Hakim Hakimi in a letter to the Mining Department of the province on August 31, 2016, asked the department to design a BHC clinic so Amania Mining Company would construct it.

However, the clinic was also not constructed.

Response from Amania Mining Company:

The company CEO, NasratAhmadzai told Pajhwok that Amania Mining Company was a legal company and it received fluorite mining contract in Nesh district in 2012.

He said that the company provided social services to local people from 2012 to 2014 over times besides working in the mine.

He said that his company spent millions of US dollars on building facilities and installing machineries for the extraction of the mine and also built a 10 kilometers road between Kandahar city and Terinkot district.

The company also dug wells for potable water and provided aid to mosques as well as built mobile clinic through which 9,714 people received treatment free of cost, he added.

Ahmadzai said that 200 to 250 local people were also hired to work by the company during the extraction of the mine.

Ahmadzai said they halted mining work for three to four years due to insecurity and Covid-19 and also reported it to the MoMP.

He also cited the attack on the company’s office and employees by the insurgents in 2017, which caused human loss as well as financial loss.

A letter No 1546/3383 in this regard was sent to the MoI by the then acting Minister of Mines and Petroleum, NargisNahan, on July 25, 2017.

The letter said the AMC was attacked by militants during extraction, killing two people, one was missing and setting alight the company’s facilities, including six different types of vehicles.

A delegation was also appointed by the ministry to investigate the incident and the MoI was asked to provide security for the company.

Ahmadzai said that in addition to similar incidents of insecurity, human and financial losses, he had also provided social services besides mining in the district, but had not been accepted by the relevant ministry.

He said not only the work done was not approved, but also the plan prepared by the ministry for social services was not accepted.

He added: “The plan was prepared in the presence of the then governor Hayatullah Hayat, Nesh district’s chief Khwaja Mohammad Tarah and tribal elders of the district at the Kandahar governor’s house on December 11, 2019. According to which, AMC will build water systems equipped with solar system for drinking and agriculture in 11 villages of the district.”

According to him, the company concerned shared the social services plan with the relevant ministry, but it was not approved in the end and implementation of the plan has been delayed.

He said the system had changed currently and their fate was unknown and their operation had been stopped.

What do former officials and tribal elders say?

Former Nesh district chief Khwaja Mohammad Tarah told Pajhwok that AMC had been operating the fluorite mine in the district for years, but had not provided social services to the people as per the contract.

He added the district was one of the most backward and remote in Kandahar and its resident were in dire need of social services such as roads, schools, health clinics and others.

He said they had repeatedly shared the issued with the provincial administration, but no action had been taken.

Tarah said the last meeting was held at the governor’s house with tribal elders and it was decided that the company should build water networks in 11 villages to solve the water shortage problem.

Haji Mullah Shakur, a tribal elder from the district, told Pajhwok that under the contract of the MoMP, it was the right of Nesh district residents to be provided social services by AMC company but it did not do so.

According to him, based on the contract, the company should build a road, 15-classroom school, a mosque, a health center, an amusement park and education courses, but that did not happen.

He called on the new authorities to force the company to provide social services to the people of the district as per the contract.

Pajhwok tried to get the comment of Taliban officials, but they could not be reached.
This report has been produced by Pajhwok and financially supported by UNDP and Denmark.


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