USAID MINING INVESTMENT AND DEVELOPMENT FOR …pdf.usaid.gov/pdf_docs/PA00MM6S.pdf · DEVELOPMENT FOR AFGHAN SUSTAINABILITY (MIDAS) ... Mining Investment and Development for Afghan

USAID MINING INVESTMENT AND

DEVELOPMENT FOR AFGHAN

SUSTAINABILITY (MIDAS) MONTHLY PROGRESS REPORT - NOVEMBER 2013

PAMIR geologists showing MIDAS team drill core samples

Contract Number: AID-306-TO-13-00003

5 DECEMBER 2013

This publication was produced for review by the United States Agency for International

Development. It was prepared by ECC Water & Power LLC.

MONTHLY PROGRESS REPORT (November 2013) 1

Contract Information

Project Title Mining Investment and Development for Afghan Sustainability

(MIDAS)

USAID Contract Number AID-306-TO-13-00003

Contracting Officer’s Representative

(COR) Khalid Ludin

Contracting Officer Maychin Ho

MIDAS Overview

The United States Agency for International Development’s (USAID) Afghanistan country strategy

includes development of sustainable economy and infrastructure in Afghanistan. USAID’s Office of

Economic Growth and Infrastructure launched the Mining Investment and Development for Afghan

Sustainability program in 31 March 2013. Its mission is to support the government of Afghanistan to

strengthen the institutional capacity of the Ministry of Mines and Petroleum and relevant private sector entities to exploit Afghanistan’s wealth of natural resources, in line with international standards.

DISCLAIMER

The views expressed in this publication do not necessarily reflect the views of the United States Agency for

International Development or the United States Government.


TABLE OF CONTENTS

Table of Contents ................................................................................................ 2

List of Acronyms ................................................................................................. 3

Executive Summary ............................................................................................ 4

COMPONENT I: LEGAL AND REGULATORY REFORM ............................. 5

Progress of Mining Law .................................................................................................... 5

COMPONENT II: CAPACITY BUILDING AND MINERAL

EXPLORATION .................................................................................................. 5

Ministry On-Budget Progress ......................................................................................... 6

COMPONENT III: MINING-RELATED ENTERPRISE DEVELOPMENT ..... 7

CROSS-CUTTING COMPONENT: GENDER ................................................. 8

PLANS FOR NEXT MONTH ............................................................................ 9

PROJECT ADMINISTRATION ......................................................................... 9

Annex 1: Training and Event Schedule ........................................................... 10


LIST OF ACRONYMS

ACOR Alternate Contracting Officer’s Representative

ADB Asian Development Bank

AGS Afghanistan Geological Survey

ANDS Afghanistan National Development Strategy

ASI Adam Smith International

AV Armored Vehicle

CBAGS II Capacity Building of AGS II (component of WB SDNRP)

CCN Cooperating Country National

CO Contracting Officer

COP Chief of Party

COR Contracting Officer’s Representative

CPFF Cost-Plus-Fixed-Fee Contract

DFID Department for International Development (UK Government)

DTL Deputy Team Leader

EGGI Economic Growth and Governance Initiative

EI Extractive Industry

E-WP ECC Water & Power LLC

GFE Government Furnished Equipment

GIRoA Government of the Islamic Republic of Afghanistan

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

H.E. His Excellency

IARCSC Independent Administrative Reform and Civil Service Commission

MAC MIDAS, ASI, and CBAGS II (donor coordination committee)

MIDAS Mining Investment and Development for Afghan Sustainability

MoMP Ministry of Mines and Petroleum (formerly Ministry of Mines)

MOWA Ministry of Women Affairs

NAPWA National Action Plan for Women in Afghanistan

NDS National Directorate of Security

OAA USAID/Afghanistan Office of Acquisition and Assistance

OEGI USAID/Afghanistan Office of Economic Growth and Infrastructure

PLSO Partner Liaison Security Office

SDNRP Sustainable Development of Natural Resources Project (WB)

SRK ES SRK Exploration Services

SME Small and Medium-sized Enterprise

TAFA Trade Access and Facilitation for Afghanistan

TAMOMP Technical Assistance for the Ministry of Mines and Petroleum (DFID-funded/ASI project)

TCN Third-Country National

TFBSO Task Force for Business and Security Operations

TI Training Institute

TL Team Leader

T-VET Technical and Vocational education and training

TO Task Order

USAID United States Agency for International Development

USGS United States Geological Survey

USN United States National

WB World Bank


This report summarizes project activities and accomplishments under the USAID Mining Investment and

Development for Afghan Sustainability (MIDAS) Project for November 1 - 30, 2013. The Monthly

Report for December is due on January 5, 2013.

EXECUTIVE SUMMARY

H.E. Minister Barekzai Endorses MIDAS Work plan. MIDAS presented its work plan to the

minister. The Minister endorsed the MIDAS work plans presented, and commented that if results

from next year’s exploration programs were positive, one or more of these opportunities could be

ready for the Ministry to tender as early as next summer or fall.

Work Plan Submitted. Component 1, 2 and 3 submitted their work-plan to USAID and awaiting

approval. MIDAS advisors reviewed the proposed work plans with the MoMP Director of Policy,

Acting Director of AGS and the MoMP legal department.

Afghan Businesses Met to Seek Support for Exploration Work. MIDAS visited Pamir

Geotechnical Services, Omran Geotechnical and Wadan Hewad Group to assess their labs, drilling

equipment, and general capabilities to address MIDAS’s future drilling requirements. Over the next

three years, MIDAS anticipates drilling at least 20,000 to 30,000 meters core of Hajigak, Shaida,

Balkhab, Badakhshan and Zarkashan projects.

Study Tour to Bamyan Province. MIDAS participated in a field trip to Bamyan mining areas of

Hajigak and Syadara organized by Afghanistan Watch to better understand the community’s

knowledge on mining, their rights and how prepared they are for development and to discuss the

impact of the extractives industry on women. The trip, especially the meeting with the Hajigak

mining council, will inform MIDAS as it works to create similar bodies across Afghanistan.

Searching for Evidence of Ancient Silver Mines in Panjshir Valley. MIDAS, DAFA and an

exploration geologist from the Afghan Geologic Survey (AGS) went on a one-day field mission to

the Bazarak village of Panjshir to search for silver deposits in a set of caves in a valley of the Hindu

Kush. Archaeological evidence, provided by DAFA, suggests the caves may be the remnants of old

silver mines.

Donor and Project Coordination. MIDAS met with several other donor organizations to share

activities and discuss collaboration; they included: DFID, ASI, CBAGS II, GIZ, TFBSO, World Bank,

and Sheberghan Gas Development Project. The MIDAS, ASI and CBAGS II (MAC) monthly meeting

was held. As a result, a combined workshop was suggested to share the results of project activities

to the Minister of Mines and Petroleum. MIDAS’s Gender advisor met Oxfam and Global Rights to

discuss needs for capacity building of lawyers in Extractive Industry issues.


COMPONENT I: LEGAL AND REGULATORY REFORM

Deliverables in Development. The team began working on two deliverable studies, the first is the

“Legal and Regulatory Assessment of the Extractive Industries Sector in Afghanistan,” including MoMP, its

departments and enabling legislation. This assessment will analyze the current Minerals Law and

recommend the regulations necessary to implement it, as well as assess the organizational structure of

the Ministry of Mines and Petroleum, including the Gender Policy Unit.

The second study in development is a “Training & Capacity Building Plan” for MoMP. A plan will be laid

out to build capacity within the MoMP and enable it to become a driver of the nation’s economic development.

Mining Legal Environment Reviewed with NGOs. The team leader met with legal advisors for

Adam Smith International, the Afghanistan Campaign Leader for Global Witness and the Program Office

for Revenue Watch Institute. These meetings provided input on the current state of the legal and

regulatory environment in Afghanistan’s mining sector as well as the current efforts to modify the environment.

Progress of Mining Law A draft of a new Minerals Law continues to be debated and considered by Parliament. MIDAS provided

USAID and U.S. Embassy officials with a brief on the pros and cons of the new draft Minerals Law, and

their potential to impact international interest in mineral development in Afghanistan. In general, most of

the raised issues could effectively be dealt with through regulatory design. MIDAS will work closely with

MoMP to develop the appropriate regulations and processes to implement an investor-friendly law that protects the rights of local communities.

Global Witness submitted a series of comments both praising Afghanistan for its development of an

amended mining regime and expressing concern that the new draft law may not go far enough to ensure

fairness and equity to all parties which may be impacted by mining. Specifically, they suggested that

procedures for dispute resolution may be too costly for local communities to invoke.

COMPONENT II: CAPACITY BUILDING AND MINERAL

EXPLORATION

Deliverable Submitted. Component 2

delivered its “Comprehensive Plan for Mineral

Targets for Exploration and Tender Process

Development” to USAID. The study provides a

frame of reference for mineral exploration and

tendering of early-stage projects, as well as

providing background information that can serve

as a point of reference for the MIDAS Exploration

strategy, particularly in regards to the mineral

commodities most sought-after by investors, and

the types of companies willing to work on early-

stage mineral deposits in Afghanistan.

Drill rigs at Omran Geo Technical Services


Afghan Businesses Met to Seek Support for Exploration Work. MIDAS visited three Afghan

owned local construction and engineering businesses to assess their equipment and capacities for future

collaboration. MIDAS visited the Wadan Hewad Group, to assess capacities for future AGS core storage

buildings. The current mining law requires that half of each drill core be provided to the AGS, but the

AGS has no facilities to securely store drill cores. Over the next three years, MIDAS anticipates drilling

at least 20,000 to 30,000 meters of core. The preferred bidders for the Hajigak, Shaida, Balkhab,

Badakhshan and Zarkashan projects could collectively drill upwards of 300,000 to 500,000 meters of

core in this same period. Adequate storage space will be essential.

Visits were also made to the offices, laboratories and equipment storage yards of Pamir Geotechnical

Services and Omran Geotechnical Company. MIDAS assessed each firm’s drilling capacities to

determine if there might be locally-owned businesses that could possibly bid on future MIDAS drilling

work. Both companies have more than 5 drill rigs (identical to the equipment owned by AGS), as well

as extensive stocks of spare parts. Local drill firms not only offer a cost savings of at least 50% compared

international firms, but they are also in it for the long run. With the proper experience, they would be a

sustainable force for mineral exploration. MIDAS will continue to gather information on other drilling

firms with experience working for US government clients.

Visit to Panjshir Valley for Evidence of Ancient

Silver Mines. On November 4, 2013, the MIDAS

team, Mr. Philippe Marquis, DAFA Director

(Délégation Archéologique Francaise en Afghanistan)

and an exploration geologist from the Afghan

Geologic Survey (AGS) went on a one-day field

mission to the Bazarak village of Panjshir to search for

silver deposits in a set of caves in a valley of the

Hindu Kush. Archaeological evidence, provided by

DAFA, suggests the caves may be the remnants of old

silver mines.

With the onset of winter weather, particularly at

higher elevations, the ability to do further field work

will likely be very limited until next April.

Minister Briefed on MIDAS and Development Opportunities. MIDAS briefed H.E. Minister

Barekzai twice this month on the work of MIDAS, including expected mineral exploration projects, and

on the major mineral commodities present in the country, their geologic setting, and their development

potential. Projects shared with the Minister included: Panjshir (Silver), Salang (tantalum), Bamyan

(molybdenum), Sya Dara (iron ore), Bamyan (granite).The Minister endorsed the MIDAS exploration

projects that were presented, and commented that if results from next year’s exploration programs

were positive, that one or more of these opportunities could potentially be ready for the Ministry to

tender as early as next summer or fall. This meeting paves the way for the future coordination of

MIDAS with MoMP.

Ministry On-Budget Progress The On-Budget Manager arrived in-country and began meeting with his counterparts from the MoMP to

plan for future activities. MIDAS is awaiting preparation of an “Implementation Letter” by USAID to be

signed by USAID, MoF and MoMP to start the on-budget process. This will happen in March 2014.

MIDAS exploring for silver in Panjshir


COMPONENT III: MINING-RELATED ENTERPRISE

DEVELOPMENT

Deliverables Submitted to USAID. MIDAS’s Mining-Related Enterprise Development team

delivered SMEs Assessment Results Report, Gender Assessment Results Report, and the

Comprehensive Plan for SME Development and Access to Finance Study for Prospective Mining Sites in

Afghanistan.

The SME and Gender Assessments collected data from nine locations create a project baseline to

monitor private sector improvements. Activities are under discussion for proposed activities. A

workshop is being developed on the results of the Gender Assessment related the mining industry and

supply sector. The Comprehensive SME Development Plan integrates the observations of all the surveys

and creates a framework to define MIDAS’ activities for Private Sector Development. The team is

currently planning for implementation of the comprehensive plan.

Comprehensive Plan for SME Development. The first phase of MIDAS’s Mining-Related

Enterprise Development team’s “Baseline Training Supply Study for Prospective Mining Sites in

Afghanistan” was completed. MIDAS recognizes the importance of Afghanization and is studying the

demand for training needs in the field near prospective mining sites. MIDAS collected data on 88 Afghan-

owned training institutes and assessed their capacity to be hired to provide training for construction,

transportation, geosciences, and business consulting SMEs. Partnering with local training providers will

ensure a more sustainable approach to SME development which ensures such trainings can continue well

after the MIDAS program is complete. MIDAS will make every effort to use local sources for training.

Some examples include a recent meeting with the American University in Afghanistan to explore

teaching business management or Kardan University. In other cases MIDAS may use the oil and gas

institute in Mazar to teach welding. The local training providers will depend on the region and the

availability of SMEs.

Developing Training on Mining Development Cycle. Based on the comprehensive plan, MIDAS is

preparing presentations indicating the different stages in mining development, with a focus on the

opportunities for private sector development at each stage.

Study Tour to Bamyan. MIDAS traveled to Bamyan on a six-day, community-focused tour of the

region, organized by a network of civil society

organizations. The group saw three mines

(Hajigak, Sya Dara, and an artisanal mine), and

visited three community development councils.

The mission identified the need to increase

community engagement to foster an

understanding of the mining sector and

development process and the need to

understand the law with respect to surface and

sub-surface rights. The community also needs

assistance to apply for land titles so that they can

receive fair compensation for relocation, to

negotiate benefits with the mining company, and

to understand the role of government in the

mining process. Hajigak mining development council in Bamyan

Province.


Government has a strategic role to help communities understand the mining process and prepare

accordingly. Some areas where government intersects includes helping people understand the law and

rights, such as surface and sub-surface rights and land titling which is a function provided by the

government. Land titling is required in order for people to receive compensation in times of

displacement. Government can also provide some mechanisms to reduce conflict. Component 3 is

preparing trainings on these two topics.

This trip helped MIDAS to discuss the impact of the extractives industry on women, and involvement of

women in Afghanistan’s mining sector. An important mission of MIDAS is to ensure that women play an

important role as participants in, and beneficiaries of mineral development. Overall, women are poorly

represented in the mining sector. MIDAS activities will include special attention towards accelerating the

skills and opportunities for women in associated businesses, and in the MoMP/AGS. We include them as

targets for community outreach, training, capacity building, and decision-making. This includes special

training for women with emphasis on culturally acceptable jobs such as accounting, finance, office

management, general services.

This experience will help MIDAS will refine its work to meet the needs of communities on the ground.

Training Institution Capacity Building. A MIDAS advisor met the Deputy Ministry of T-VET to

brief him on the activities of MIDAS and to discuss the opportunities for training institutes to play a role

in private sector development for the mining sector. MIDAS aims to make a lasting impact on the mining

industry through building the capacity of local training institutions and improving knowledge sharing

among the MoMP and the MoE, MoHE, MoLSAMD, and DM-TVET.

MIDAS met the CINOP Program, aimed at introducing national occupational standards in Afghanistan.

There is currently little training in geosciences due to poor awareness of the opportunities in the

extractives sector.

CROSS-CUTTING COMPONENT: GENDER

As part of efforts to mainstream gender across all components of MIDAS, the Gender Advisor

continued to work closely with team leaders to review and adjust their work plans.

MIDAS met with the MoMP Gender unit to encourage them to outreach and educate the stakeholders

on the importance of gender equality issues in mining sector. MIDAS will continue to meet with

stakeholders in December.

MIDAS’s Gender advisor presented the importance of gender equality in the mining sector, at a

workshop to highlight extractive industry issues to civil society run by Afghanistan Watch and Global

Rights in Kabul from November 7-10, 2013.

The MIDAS Gender advisor provided input on gender issues for the final draft of the Strategic

Environmental and Social Assessment for the Extractives Industry Sector in Afghanistan (SESA-EISA)

document. The paper will be aligned with the Environmental and Social Management Framework (ESMF)

for Afghanistan, as a guide to GIRoA’s future development of the sector, prepared by the GIRoA with

the support from the World Bank.

MIDAS will begin work on the development of a virtual resource collection and bibliography on gender

and extractive industries, next month. Training materials will also be prepared.


PLANS FOR NEXT MONTH

Component I

Complete the following deliverables; Legal and Regulatory Assessment of the Extractive Industries

Sector in Afghanistan, and the Training & Capacity Building Plan for MoMP.

Component II

Assess the drilling equipment and capacity of AGS crews to conduct planned 2014 exploration

drilling programs

Continued research and evaluation of lower-cost drilling options.

Weather-permitting, a possible one-day exploration trip is planned to the Salang Pass Tantalum

project to assess road access and other logistical issues for 2014 exploration work.

Work with USAID and MoMP to progress the on-budget program.

Component III

MIDAS will develop workshops to support SMEs to meet workforce demands in pre-exploration

and exploration phases of mine development.

A field exursion to Badakhshan and Takhar gold deposit sites plus visits with the government,

MOMP, SMEs, and educational institutes.

Planning detailed training programs, community engagement and training events (see Annex I).

PROJECT ADMINISTRATION

Logistics

MIDAS located and built out new office space at the Baron Hotel after negotiations and took residence

in the new office space at the end of November. MIDAS was informed in October that their office space

in the Chemonics Block at the Baron Hotel was to be vacated and returned to Chemonics by the end of

November. MIDAS’s has also been provided with office space inside Barron Hotel for its M&E team.

The Ministry provided MIDAS with a second office at AGS in October. To date, MIDAS has been unable

to gain access to that room due to the prior occupant not having moved out. Efforts will be re-doubled

in December to secure access to that new office.

Security

No major security incidents were reported during the reporting period. All movements in and outside

of Kabul proceeded safely. MIDAS experienced two days of mission critical movements within Kabul

City, the first on November 14 which was Ashura Day and the second on November 21 which was the

first day of the Loya Jirga.

Vehicles

USAID inspected the damaged armored vehicle 228 EWP and recommended to destroy it. MIDAS is

reviewing tenders for lease of 2 additional soft skin vehicles. All other vehicles are operating normally.


ANNEX 1: TRAINING AND EVENT SCHEDULE

Summary of Training Activities for Component 3

MIDAS Component III is focused on private sector development that directly and indirectly supports the

extractives industry. It will focus on the following three initiatives:

Community Engagement and Civil Society Capacity Building – Eight training modules will be

developed with consultation from the MOMP and delivered in February to at least 100 participants from

the MoMP, Civil Society Organizations, donor projects, community leaders, training institutes, other

governmental departments, and SMEs. The objective is to train trainers and other groups who operate

in the nexus of communities, private sector, and mining initiatives to understand the mining industry and

stakeholder roles and activities to nurture and advance the private sector.

Long-term Strategic Development Initiative with MOMP to Develop Mining Private Sector

– MIDAS will work with the Directorate of Policy and Investment Directorate from the MOMP to

empower communities to analyze the mining sector, explore scenarios for development, and design a

five-year strategic plan on the development of the mining sector as an engine of growth for Afghanistan.

It will build on the Community Engagement training.

SME Training and Capacity Building – this initiative will support SMEs with training, mentoring, and

support. With improved expertise, SMEs can win contracts from mining investors and offer firms the

level of service needed.

The expected training schedule is as follows:

Community Engagement and Civil Society Capacity Building

Training Description Time Period Estimated Number of

People Trained

Design and deliver 8 training modules to

prepare communities and other stakeholders

to understand the process of mining

development and how they can prepare to

play a role in the private sector

December 1, 2013

to February 28,

2014

200 people from various

communities, civil society

organization, MoMP, other

governmental departments,

SMEs, and financial institutions.

A Long-term Strategic Development Initiative to Develop the Mining Private Sector


People Trained

2 Study Tours to Mines in Kyrgyzstan and

Mongolia to visualize how large mines

operate, understand the role of all

stakeholders to support private sector

development in mining

May – June, 2014 90 people from MOMP,

Communities, CSOs, SMEs,

financial institutions, training

institutions


Strategic Vision and Long Term Planning

training for MoMP to engage citizens and

stakeholders in a co-constructed mining

sector development plan

January – June,

2014

100 people from MOMP,

communities, CSOs, SMEs,


institutions

National Mining Conference to Train

stakeholders on processes to stimulate

private sector and illustrate progress in the

mining sector

September, 2014 150 people from MOMP,

communities, CSOs, SMEs,


institutions

Community Development Agreement

training and roundtables, Economic

Development Forums in the regions

August, 2014 25 people per region (estimated

3 regions) = 75 people

Business Enabling Environment Training with

Financial Institutions and leasing companies

to support mining.

To August 2014 50 people trained (banks,

Chambers of Commerce, and

others)

Intergovernmental training to improve

coordination and stimulate private sector

development (Ministry of Education,

Commerce and Industry, Foreign Affairs,

Labor, and others.

June, 2014 20 people from governmental

entities

Knowledge Hub meeting to integrate

learnings from each donor project into the

MOMP activities (monthly)

January –

September, 2014

200 people trained at the

MOMP and other mining

initiatives

SME Training and Capacity Building


People Trained

Training for SMEs on how to apply for

tenders, how to write contracts, etc

March – June, 2014 30 people x 3 days = 90 people

(at least one person from 30

SMEs)

Assist SMEs with training in business

management, health and safety, and services

(welding, drilling, etc)

March – June, 2014 20 people x 15 days = 300

people (at least one person

from 30 SMEs)

Documents

USAID MINING INVESTMENT AND DEVELOPMENT FOR …pdf.usaid.gov/pdf_docs/PA00MM6S.pdf · DEVELOPMENT FOR AFGHAN SUSTAINABILITY (MIDAS) ... Mining Investment and Development for Afghan