In a cold auditorium in Afghanistan, piles of freshly mined green emeralds glistened under bright table lamps as bearded gem dealers inspected them for purity and quality.
The auctioneer called for bids on the first lot, which weighed 256 carats. This led to the start of weekly jewelery auctions by the Taliban.
The sales, in eastern Afghanistan's emerald-rich Panjshir province, are part of the Taliban government's efforts to cash in on the country's vast mineral and gemstone potential.
Since seizing power in August 2021, the Taliban has announced deals with numerous investors to mine precious minerals such as gemstones, gold, copper, iron, and chromite. These reserves provide a potentially lucrative lifeline for fragile economies.
China has led investments under its Belt and Road Initiative, an aggressive effort to extend China's influence around the world. Russian and Iranian investors have also signed mining licenses, filling the void left by the chaotic US withdrawal in 2021.
The US government estimates that at least $1 trillion worth of mineral deposits lie beneath Afghanistan's rugged terrain. The country is rich in copper, gold, zinc, chromite, cobalt, lithium and industrial minerals, as well as precious and semi-precious gemstones such as emeralds, rubies, sapphires, garnets and lapis lazuli.
Afghanistan is also a rich source of rare earth elements, according to the Office of the Special Inspector General for Afghanistan Reconstruction, a U.S. agency that will close this year. Such elements are used in various modern technologies such as mobile phones, laptops, and electric cars.
The Taliban are trying to do what the United States was unable to do during its 20-year occupation. The U.S. government has spent nearly $1 billion developing mining projects in Afghanistan, but “measurable progress has been minimal and unsustainable,” the special inspector general said in a January 2023 report. I concluded.
Many of the hurdles from then may still apply today, including lack of security, poor infrastructure, corruption, inconsistent government policies and regulations, and frequent transfers of government officials.
Nevertheless, the Taliban is pursuing the attack in a desperate need for revenue as aid from Afghanistan plummets with the US withdrawal.
During the war, the United States provided approximately $143 billion in development and humanitarian aid to Afghanistan, supporting the U.S.-allied government. Since 2021, the U.S. has provided $2.6 billion in such aid, delivered by private contractors in shrink-wrapped bundles of cash on planes bound for Kabul, according to the special inspector general.
The World Bank reported in April that Afghanistan's economy had shrunk by 26% over the past two years. With a sharp decline in international aid, Afghanistan has “lost its internal growth engine”, the central bank said.
In addition, the Taliban's ban on opium production cost farmers $1.3 billion in income, equivalent to 8% of Afghanistan's gross domestic product, the World Bank said. According to a report by the United Nations Office on Drugs and Crime, the ban has resulted in the loss of 450,000 jobs and a 95 percent reduction in land for poppy cultivation.
Mining could provide a stable source of income in place of poppies. Türkiye and Qatar, along with China and Iran, are investing in iron, copper, gold and cement mines. According to the Ministry of Mines and Petroleum, an Uzbek company has signed a contract to extract oil in northern Afghanistan.
The Taliban already collect taxes from the sale of emeralds.
Under the previous government, the emerald trade was corrupt and free-for-all. Warlords and politically connected dealers controlled the trade, and tax collection was haphazard at best.
However, the Taliban government began weekly emerald auctions, controlled and taxed all sales. Dealers who purchase emeralds at auction do not receive the gemstones until they have paid a 10 percent levy.
The Taliban also tax other gemstones, such as rubies and sapphires.
Rahmatullah Sharifi, a jewelry dealer who bought two sets of emeralds at auction, said he was not concerned about paying taxes.
“The government needs money to develop the country,” he said. “The question is, will they use that money to help the people of Afghanistan?”
Mines and Petroleum Ministry spokesman Hamayun Afghanistan said the government had issued 560 emerald licenses to foreign and Afghan investors in Panjshir province, where most of Afghanistan's emeralds are mined.
Afghanistan said the ministry has also granted ruby mining licenses in Panjshir and Kabul provinces, and plans are underway to obtain emerald and precious stone licenses in three other provinces.
However, many of the new licenses are for mines that have not yet opened. And many existing mines are held back by poor infrastructure and a lack of experienced engineers and technical experts.
Afghans acknowledged that the country needs more engineers and technicians. He said foreign investors are bringing in experienced professionals and are required to hire Afghans under license and teach them technical and engineering skills.
Most of the emeralds bought at weekly auctions are resold to foreign buyers, dealers said. One day in November, among the dealers buying emeralds was Haji Ghazi, who sells gemstones in a cramped, cell-like room crowded with dark shops in downtown Kabul.
Two days after the auction, Ghazi bolted the store door, closed the curtains and unlocked the ancient safe. He pulled out a stash of several emeralds and rubies, each wrapped in plain white paper.
Ghazi's largest set of emeralds is probably worth $250,000, he said. He estimated that the much smaller bright ruby cache was worth $20,000.
In the corner, Ghazi had piled up a heavy chunk of rock with deep blue veins of lapis lazuli, a semi-precious stone. Much of the world's supply of lapis is mined in northern Afghanistan.
Ghazi sells most of his jewelry to buyers in the United Arab Emirates, India, Iran and Thailand. He said he was nostalgic for the days before the Taliban took over, when eager buyers came from the United States, Britain, France, Germany and Australia.
In an adjacent shop, Azizullah Niyazi turned on a desk lamp, illuminating a collection of lapis lazuli, rubies, sapphires and emeralds spread out on a small table. He was still waiting for the first customer of the morning.
Niyazi said sales weren't as strong as they were during the 13 years he was allowed to sell jewelry one day a week in a small shop on a US military base. His profits soared as soldiers and civilian contractors lined up to buy the jewelry every Friday. And unlike Afghan and Arab buyers, there was little haggling, he said. He said he paid 7% tax on his profits.
These days, Niyazi has to travel to increase his sales. He opened a store in China and said he visits there regularly. In Kabul, we sell to buyers in Dubai, the United Arab Emirates, Pakistan, Iran, and several other countries.
He has few Afghan customers.
“Not many Afghans can afford to pay $1,000 or $2,000 for a stone to make a ring,” he said with a shrug.
Safiulah Padshah, Yaqoob Akbary and Najim Rahim contributed reporting.
