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Integrity Watch Afghanistan discovers illegal extraction of gold

in Afghan Business

Integrity Watch Afghanistan discovers illegal extraction of gold

IWAIntegrity Watch Afghanistan survey findings of the Qara Zaghan Gold Mine show that The Afghan Krystal Natural Resources Company (AKNRC) breached their contract by extracting gold for profit while possessing only an exploration licence. Illegal Extraction was taking place at the time of the survey. According to the contract exploration activities should have ceased in July 2013. The survey found the Company to be in cooperation with two- men who conceal the illegally extracted gold and dispatch the raw material to another area for processing before being sold. Employees at the mine are unaware of the quantity of gold extracted or where it is being taken to.

The survey found that no one can reach to the mining area because of the security limitation created by the AKNRC guards, making it impossible for local people, those most affected by the mining in their area, to be engaged in the monitoring process. Local women and men are willing to monitor the mining activities and consider it their right. Speaking to the Media, Sayed Ikram Afzali the Executive Director of Integrity Watch Said: “The Afghan Krystal Company should be instructed by the Ministry of Mines and Petroleum to implement its activities as agreed in the minerals development contract. The MoMP should consider engage local people to form a network and conduct further monitoring, backed by the support of the Ministry. Unfortunately the mining law recently passed by the parliament does not provide legal bases for this”.

The large majority of AKNRC’s work force is brought in from the outside. Because of low-level of income and lack of employment opportunities, the majority (about 80 percent) of households remain poor, of which 35 percent are very poor. The company has not provided any of the “promised” community development services. Local residents complained that AKNRC only employs a specific group of people, offering no jobs to the rest of the population, which they feel is discriminatory.

The majority (79 percent of men and 99 percent of women) are in the dark about AKNRC mineral development activities. The majority of the population says that the company has not provided them with information about their operations such as; the number of people employed, future employment prospects for villagers, wages given, what the company is doing at present, future plans for development (including land acquisition), or when the “promised” infrastructure is expected to be built. The study uncovered that the consultation and participation of local people in minerals development activities remains incredibly low.

Land ownership in the study area is a significant issue that affects the livelihoods of people. Confiscating land for the sake of minerals development has critical impacts on the socio-economic lives and the livelihoods of the affected people. The utmost importance should be given to land acquisition in Afghanistan’s fragile economy. The Mineral law lacks directives for the compensation of displaced or mining affected Afghans; it also lacks a well-defined dispute resolution mechanism.


  1. There must be inspections of mining sites and the MoMP must share quarterly progress reports publicly to inform stakeholders about project implementation.
  2. The company must prove that they offer equal job opportunities for all locals where discrimination for any reason is strictly prohibited and a dispute mechanism is in place.
  3. The Afghan Government must, either by itself or by contractually obligating mining companies, take adequate measures to improve access to, and the quality of, health and education systems for the affected population.
  4. More international and government support to civil society is recommended for further research investigations relating to Qara Zaghan as well as for other areas affected by mineral extraction.
  5. Civil Society must prepare periodic reports on the development around mines, conflict, environment and advocate on behalf of communities.
  6. The Afghan government must include contractual provisions for mining companies to train and employ local populations in mining projects, as well as ensure those contractual provisions are implemented to avoid channelling mining affected Afghans towards anti-state actors.
  7. People who lose land to any mining project must be consulted, negotiated with, and compensated at market prices under a fair State sponsored mechanism.
  8. The Afghan government should   access to information to all people.

We strongly recommend that Civil Society recommendations which are based on international standards taken into account of the next government of Afghanistan. We urge the new president to not sign on the recent mining law passed by the parliament and send the law back to them to include Civil Society recommendations including the ones mentioned above.


The study which was initiated independently by Integrity Watch Afghanistan was undertaken by a team of researchers at IWA. The data collection took place during the months of April and May 2013.

The research methodology adopted involved twenty two focus group discussions, five key-informant interviews and surveys, which were administered to 398 households in Qara Zaghan villages. The information collected was further enhanced by observations made by the study team.

The Qara Zaghan Gold Mine is located in the Dushi district of Baghlan province in Afghanistan, Qara Zaghan Gold Mineral District (QZGMD) consists of four clusters of gold deposits scattered in 8 villages within the same district. Small-scale gold extraction has been carried out in Qara Zaghan for 2 to 3 decades. With the adoption of the Minerals and Hydrocarbon Laws (MHCL) of Afghanistan (2010), mineral activities were formalized by a local company by the name of Afghan Krystal Natural Resources Company that obtained a license for gold exploration (only) on January 10, 2011.

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