Kabul’s Iron Woman Champions Afghanistan’s Mineral Resources

(Bloomberg Businessweek) -- As a female politician in a country where many women still struggle for basic rights, Nargis Nehan is used to standing out. In December 2017, at age 38, she was the only woman of 12 acting ministers seeking confirmation to the cabinet by Afghanistan’s parliament. Winning approval to remain head of the ministry of mines and petroleum was the highest-profile test of her political career—and initially it seemed like she’d failed.

Afghanistan’s rugged, landlocked terrain holds vast mineral wealth, including Hajigak, one of the world’s largest iron deposits, as well as copper, gold, lithium, chromite, manganese-rich forms of columbite and tantalite, precious and semiprecious stones, rare-earth metals, and uranium. Some estimates peg the collective value of these resources at $1 trillion or more—if they can be brought to market despite extreme security, logistical, and political challenges.

When President Ashraf Ghani appointed Nehan acting minister in 2016, with a mandate to reform the sector and attract international investment, she knew she’d be fighting corrupt, entrenched interests. “I never learned the art of keeping quiet, and I don’t want to learn it,” she says, sitting in her heavily guarded office in Kabul. By the time she came up for confirmation, she’d been in the job almost a year. She’d upset some powerful people by canceling a number of irregular-looking contracts, and she’d refused, she says, to engage in the horse-trading and bribery that commonly precede confirmation votes. “All my friends were telling me, ‘Look, you’re going to lose,’ ” Nehan says. They proved correct. “Deep down I kind of knew,” she says. Yet it stung to learn she’d been the only one rejected.

The apparent sexism of the decision brought an outcry from civil society. “MPs started fighting amongst themselves,” she recalls. “They were blaming each other, like, ‘Why did we do this?’ ” In the end, Ghani kept her on without pushback from parliament. “I said, ‘Now that you didn’t give me the vote, that means I can double and triple my reform.’ ”

Nehan was born in Kabul, a middle child with three brothers and five sisters. When she was 11, her family fled the Soviet occupation, and she grew up in Pakistan as a refugee. She was a voracious student, eager to learn more than local schools could offer, but Afghan families traditionally prioritize male children’s education, and there were nine kids to consider. Still, her father found the money. “He said, ‘What I saw in you I didn’t see in your brothers and the rest of the sisters,’ ” she remembers.

She repaid this trust by graduating from a university in Peshawar and getting a job with a foreign nongovernmental organization, becoming the family’s main breadwinner. She returned to Kabul in 2002, in the aftermath of the U.S.-led invasion. The city was shattered, but it was full of opportunities for an English-speaking, computer-literate Afghan woman. She helped open the Norwegian Refugee Council’s office, then was hired by Afghanistan’s ministry of finance.

Nehan considers two people to be inspirations for her career. The first is Mahatma Gandhi. The second is Ghani. One of the raft of Afghans who were abroad during the country’s decades of war, he’d pursued an academic career before returning to become finance minister and develop a reputation as a fastidious reformer. Even though Nehan was just 23, Ghani appointed her director general of the treasury, where she oversaw its computerization. When he left the ministry, she followed him to become a vice chancellor at Kabul University and then to a number of increasingly senior government roles.

Nehan joined Ghani’s team as an adviser when he became president in 2014, but she was soon diagnosed with breast cancer. After she returned from treatment abroad, her cancer in remission, he offered her a choice of two ministerial positions. She chose the harder one: mines. “I thought, Here I can do something that will repay the trust he has given me,” she says. “It was a totally messed-up sector.”

Even granted Afghanistan’s other problems, her new portfolio was notorious. “It’s a corrupt ministry. It’s an anarchic ministry,” says Naser Timory, head of advocacy and communications for Integrity Watch, an Afghan monitoring group. “There is interest in mining from the Afghan parliament, from generals, and from warlords.” The Islamic State group and the Taliban are estimated to make millions of dollars a year from substances such as chromium and talc, while warlords have seized lapis lazuli mines and other resources.

Nehan’s immediate priorities included sorting out which mining operations were legitimate businesses and expediting licenses for them. She’s optimistic that, even though the government doesn’t control large swaths of the country, security forces can deal with the warlords and militants. “We are going to have operations, and we’re going to clean up those areas,” she says.

It will be at least as challenging to get large-scale projects underway. Two huge concessions, at Hajigak and Mes Aynak (which has an estimated 690 million tons of copper ore), were awarded by the previous administration to an Indian consortium and China Metallurgical Group Corp., respectively. Many observers suspected the bids were unrealistic, more related to India’s and China’s plays for regional influence. The terms looked generous—the Chinese company promised a power station and a trans-Himalayan railway—but had caveats that made backing out easy. “Yes, we will build a railway, but only if the feasibility study says to go ahead,” Nehan says. “The feasibility study came and said none of them were feasible. So was it a good deal for the country? No.” A decade or so later, Hajigak remains almost untouched, while Mes Aynak has stalled in its preparatory phase, in part over archaeological concerns. Nehan hopes to resolve those issues this year and says she’s pressuring the Indian consortium to resume negotiations under threat of canceling the tender. (China Metallurgical and the Steel Authority of India, leader of the Indian consortium, didn’t respond to emailed requests for comment.)

Contracts signed under Ghani have also proved controversial. In late 2018 the government gave two high-profile deals, for gold and copper, to U.S.-based Centar Ltd. But Centar’s local partner, Sadat Naderi, had been minister of urban development and housing until earlier in the year, and Afghan law forbids the government from signing contracts with former ministers for five years after their service. “Our first position was that it’s illegal,” Timory says. “The second was that Afghanistan was not ready, in terms of state capacity, to award large contracts.”

He acknowledges that, with President Trump threatening to withdraw U.S. troops, Ghani’s administration needed to show the potential benefits of remaining engaged. Timory surmises that the pressure on Nehan, one of several cabinet members involved in the bidding, was overwhelming. “I think she tried, she was genuine,” he says. “At a certain point in time, she had to go along.”

The government has argued that, because an earlier version of the contract was approved in 2012, before Naderi became a minister, it didn’t run afoul of the five-year rule. And Nehan says Naderi’s resignation meant there was no conflict of interest. “He had zero influence over the process,” she says, calling Integrity Watch’s criticism “very unfair.” (Centar has said the contract was negotiated “in strict adherence to Afghan law and international standards.”)

Nehan acknowledges her country is a difficult sell to foreign investors but expresses hope for the generation of Afghans who made fortunes from the international contracts flowing in since 2001. These people, she says, are looking to diversify their investments. She cites several recently approved projects in the eight-to nine-figure range for things such as cement and talc plants. “It’s just important that we go through a transparent process,” she says, “and give them the confidence that our system is fair.”
 
This story is from Bloomberg Businessweek’s special issue The Elements.

To contact the editor responsible for this story: Jeremy Keehn at jkeehn3@bloomberg.net, Jim Aley

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