When Gold Is the Only Job in Town

In the mountains of northeastern Afghanistan, gold is creating something that is desperately scarce in the country: work. Across Badakhshan province, excavators have moved into valleys where livestock once grazed, men have arrived from other parts of Afghanistan looking for employment, and what was once largely small-scale or artisanal extraction has grown into a much more substantial industry. Afghanistan's authorities, meanwhile, increasingly see the country's considerable mineral wealth as one possible route towards an economy less dependent on foreign assistance.

There is little doubt that the resources themselves are real. Badakhshan has been associated with precious minerals for centuries and is particularly famous for lapis lazuli, but Afghanistan's Ministry of Mines and Petroleum also identifies numerous occurrences of gold and other metals in the province. Large gold projects have been offered for tender and smaller operations have spread through several districts. For a country as poor as Afghanistan, leaving valuable natural resources permanently underground is hardly an obvious economic policy. Mining creates jobs, supports local businesses, attracts investment and can provide public revenue in a state with relatively few dependable sources of it.

The difficult question, therefore, is not whether Afghanistan has a right to benefit from its gold. It plainly does. The more interesting question is how much of that benefit will remain in the country, and particularly in the communities where the gold is being extracted, once the metal itself is gone.

A gold rush measured in jobs

Establishing the precise scale of Badakhshan's gold economy is difficult, and different official reports appear to measure employment differently. Recent Afghan reporting cited the Ministry of Mines and Petroleum as saying that more than 100,000 people were employed directly or indirectly in gold extraction and related activities across several districts of Badakhshan. The ministry also said mining companies were financing 17 development projects worth 223 million afghanis, including roads, bridges and water-supply infrastructure.

A separate report carried by PAP and Poland's o2 cited the provincial mining department as estimating that approximately 70,000 to 80,000 people were working in the largest gold-mining areas, with 112 kilograms of gold reportedly extracted during the previous year. The figures should not necessarily be treated as contradictory, since one appears to include broader direct and indirect employment while the other concerns workers in the principal mining areas. What they show, even allowing for imperfect statistics, is that gold mining has become an important part of the local economy.

This is no longer simply the romantic image traditionally associated with a gold rush: a few prospectors standing in a river and patiently washing gravel in search of yellow specks. Mechanisation has changed the scale of the operation. Excavators, pumps and other equipment allow considerably more earth and sediment to be processed, while an expanding industry creates work not only for miners but also for drivers, mechanics, traders, suppliers and other businesses around them.

That scale makes the argument over mining considerably more complicated.

It is easy to condemn a mine from somewhere else

There is an understandable temptation to look at photographs of disturbed riverbanks and excavated valleys and conclude that the mining should simply stop. From a comfortable office in Europe, protecting an Afghan mountain from industrial development can sound like an uncomplicated proposition. The calculation looks rather different from Badakhshan.

Afghanistan has endured more than four decades of war and political instability. Formal employment opportunities remain scarce, infrastructure is inadequate across much of the country, investment is difficult to attract and poverty remains widespread. Under those circumstances, a mining operation offering paid employment is not an abstract argument about environmental policy. For many households it represents an income where few alternatives exist.

Even Afghanistan's own pre-Taliban policy on artisanal and small-scale mining recognised that much of this activity was driven by poverty. Mining provided livelihoods while simultaneously creating problems involving safety, environmental damage, informality and lost government revenue. The dilemma predates the current government because the underlying economics have changed remarkably little: people living above valuable minerals will try to extract them when other ways of earning a living are scarce.

This is one reason discussions about mining in developing economies can become uncomfortable. Many of today's wealthy countries built their prosperity through centuries of extracting coal, iron, copper, oil, silver and gold, often with environmental standards that would now be considered unacceptable. Telling poorer countries that they should simply leave their own resources untouched is not, by itself, a development strategy.

Badakhshan's gold therefore represents a genuine economic opportunity. The problem begins when extraction develops more quickly than the institutions capable of regulating it.

The river sends the bill

Gold has a peculiar ability to conceal the circumstances of its production. A finished bullion bar is clean, compact and almost unnaturally simple. There is nothing on its polished surface to show how much rock was moved, how much water was used, what machinery was required or what happened to the landscape from which the metal originated.

In Badakhshan, those invisible costs are becoming increasingly difficult to ignore. Recent research and reporting have raised concerns about mining along the Kokcha and Sheva river systems. Alluvial mining involves moving and washing large quantities of river sediment, while other forms of extraction produce crushed material, slurry and tailings that must be managed properly. Reports from the region describe disturbed riverbeds, altered waterways and concerns about sediment and potentially hazardous substances entering water systems.

The Polish report that prompted this article included testimony from local residents who said waterways previously used for drinking and washing had deteriorated as mining intensified. A 74-year-old farmer interviewed by AFP described water that had once been clean but was, in his view, no longer suitable even for washing.

This is where calculating the value created by mining becomes much harder. A new mining job can be counted. A kilogram of extracted gold can be weighed and assigned a market price. Taxes, royalties and licence payments can be entered into government accounts. Environmental deterioration is harder to put into the same spreadsheet. If agricultural land becomes less productive, if clean water becomes more difficult to obtain or if a river eventually requires expensive restoration, somebody still bears those costs even if they never appear on the mine operator's balance sheet.

How much is a mountain worth?

Consider a purely hypothetical deposit containing $100 million worth of recoverable gold. It is tempting to say that the mountain contains $100 million of wealth, but that is not how mining economics works. Machinery and fuel must be financed, workers must be paid, roads may have to be constructed, and the ore has to be extracted, processed, transported, refined and eventually sold. Investors expect a return and governments may collect taxes, royalties, licence fees and other payments. Local businesses can benefit from the additional activity.

At the same time, some of the costs may be borne by people who never receive a share of the mining revenue. Farmers can lose productive land, households can face difficulties accessing clean water and communities can inherit damaged landscapes after the commercially recoverable mineral has been removed. A mine may operate for years or decades, whereas a river or agricultural valley can support a population for generations if it remains healthy.

None of this automatically means the gold should remain underground. It simply means that the market value of the metal and the economic value created by extracting it are two different things. For countries rich in natural resources but poor in capital, understanding that distinction can determine whether mineral wealth becomes a foundation for development or merely something valuable that passes through the economy on its way elsewhere.

Who actually gets the gold rush?

This brings us to a question at least as important as the environmental debate: where does the money go?

Afghanistan's mining sector has expanded significantly since the Taliban returned to power in 2021. Afghan Witness identified at least 205 mining contracts awarded to more than 150 companies between August 2021 and February 2024. In September 2023, Taliban authorities announced mining agreements with a stated value exceeding $6.5 billion, although headline contract values should not be confused with money actually invested, minerals actually extracted or revenue actually received by the government.

Foreign investors, including Chinese-linked businesses, have also become involved in Afghanistan's wider mineral industry. Foreign capital can provide precisely what Afghanistan lacks: machinery, financing, technical expertise and connections to international markets. Properly structured, such investment could allow the country to develop deposits that it would struggle to exploit on its own.

It also raises a question familiar to almost every resource-rich developing economy. If gold begins its journey beneath an Afghan mountain, what proportion of its eventual value remains in Afghanistan? Of the portion that does, how much reaches Badakhshan itself and how much reaches the communities living beside the mines?

There is no reason why the answers have to be entirely negative. A mining project can simultaneously provide thousands of jobs, create profitable businesses, generate government revenue and provide investors with a return. The real measure of success is whether enough of the wealth created by a finite resource is converted into something that continues producing value after the resource has been extracted.

The miners are not merely characters in someone else's story

Recent disputes around mining operations illustrate how deeply local livelihoods have already become connected to the industry. Authorities have moved against operations they regard as unlicensed in parts of Badakhshan and neighbouring Takhar. Mine workers in Badakhshan have protested against closures, arguing that interruptions to mining leave families without income. There have also been allegations that enforcement has not always affected operators equally, although such claims are difficult to verify independently and should be treated cautiously.

Whatever the politics behind individual disputes, the broader point is important. Once tens of thousands of people depend directly or indirectly on gold extraction, simply stopping the excavators is no longer a straightforward environmental solution. Families, suppliers and entire local economies begin reorganising themselves around the industry.

That makes effective regulation more difficult, but it also makes it more important. Formalising operations, enforcing environmental standards and collecting public revenue can increase costs in the short term. Allowing an industry to grow without those controls may create much larger costs later.

The resource curse is not really about resources

Economists have long discussed the so-called resource curse, the observation that countries blessed with extraordinary natural resources do not automatically become extraordinarily prosperous. Some resource-rich states have built successful economies; others have experienced corruption, conflict, environmental degradation and extreme inequality despite exporting enormous quantities of valuable material.

The term itself can be misleading. Oil, copper and gold do not curse countries. The decisive factor is usually what happens around them.

Natural wealth can finance roads, schools, electricity systems and industrial development. It can attract capital, create skilled employment and provide foreign-exchange earnings. It can also concentrate wealth and political influence, encourage corruption, damage competing industries and leave local communities with environmental liabilities after the profitable material has disappeared.

The same gold deposit can contribute to either outcome. Geology determines where the gold is found, but institutions determine much of what the gold ultimately becomes.

Gold has always travelled away from the mine

There is something particularly striking about gold in this respect. Most of the people who eventually own Badakhshan's gold will probably never see Badakhshan.

The metal can pass through local traders, exporters and refiners, cross national borders, be melted and refined again, and eventually emerge as jewellery, an investment bar, an industrial component or perhaps part of an institutional reserve. Its physical origin becomes increasingly invisible with every stage of that journey.

A few grams extracted beside an Afghan river can eventually sit inside a perfectly polished bar in a vault thousands of kilometres away. To its final owner, it may be indistinguishable from metal extracted in Australia, Canada, South Africa or Peru.

The landscape does not travel with it. Neither does the miner who extracted it, nor the river beside which the work took place. Only the gold continues its journey.

For anyone involved in physical gold, that is worth remembering. Ownership may begin with a purchase, but the story of the metal begins much earlier.

So should Afghanistan mine its gold?

There is no particularly satisfying one-sentence answer. Calling for less mining, better regulation, cleaner rivers and a larger share of the proceeds for local communities is easy. Achieving all of those things in one of the world's poorest and most politically isolated countries is considerably harder.

The alternative to formal mining is not necessarily an untouched landscape. When gold remains valuable and local populations remain poor, prohibiting legal extraction can simply push activity into informal or illegal channels. Those operations can be harder to regulate, less safe for workers, more difficult to tax and potentially more environmentally destructive.

The realistic challenge is therefore not to force Badakhshan to choose between mining and poverty, or between gold and nature. It is to build a mining economy capable of converting a finite underground resource into assets that continue to produce value once extraction ends.

If a community gives up part of its landscape and a resource that took geological time to form, something durable should remain behind. That might mean better roads and water systems, schools and skills, household savings, functioning local businesses or other industries capable of providing employment after the mines eventually close. The precise combination matters less than the principle: the legacy of a gold deposit should be measured by more than the hole from which it was removed.

The real price of gold

Most of us encounter gold at the very end of its journey. We see a market quotation, an ounce, a gram, a coin or a bar. The price tells us how much somebody is willing to pay for the metal at that moment, but it tells us almost nothing about what happened before the gold reached the scale.

Badakhshan reveals the other balance sheet behind physical gold. There are jobs created and incomes earned, government revenues collected and investments made, but there are also tonnes of earth moved, waterways altered and communities changed. Some opportunities are created while others may be lost.

None of this makes gold inherently good or bad. Gold is valuable enough that human beings have crossed oceans, dug through mountains and reorganised economies to obtain it. Afghanistan has every reason to want the wealth beneath its mountains to improve the lives of the people living above them, and responsible mining could form part of that process.

The success of Badakhshan's gold rush, however, should ultimately be judged by more than the number of kilograms extracted or the market value of the metal that leaves the province. The more important question is whether today's mineral wealth can be converted into tomorrow's economic wealth.

The true measure of a gold rush is not simply how much gold comes out of the ground, but what remains when the gold is gone.


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