Fascinating story in Fortune about a JV in Afghanistan by J.P. Morgan (JPM) and the Pentagon seeking to tap the country’s vast mineral riches:

“Investing in conflict zones is often thrilling, but the great commodities rush that J.P. Morgan and the Pentagon are trying to spark in Afghanistan creates a risk/reward equation of a different magnitude. It’s extreme at both ends.

When J.P. Morgan launched its Afghan initiative in 2010, violence was at its worst since the American-led occupation began in 2001. The Taliban have made a point of killing Westerners and have specifically said they would attack any companies involved in mining. Before our trip to the mine was done, our group would get a taste of the insurgents’ ability to strike violently and unpredictably.

Then there’s the Afghan infrastructure — or rather, there isn’t. Big mines need power, lots of it. Outside of cities, only 15% of Afghanistan is electrified. The mountain roads — ungraded and often without guardrails — are perilous, I learned the hard way, particularly in winter. Seat belts? No one bothers. You crash, you die.”

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Source:
J.P. Morgan’s hunt for Afghan gold
James Bandler
Fortune, May 11, 2011
http://management.fortune.cnn.com/2011/05/11/jp-morgan-hunt-afghan-gold/

Category: Gold & Precious Metals, War/Defense

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “Hunting for Afghan Gold”

  1. crutcher says:

    Shows you how much JPM knows about resources. Afghanistan is an absolute nightmare for miners.

    With comparable undeveloped deposits in Mongolia, Tibet and Alaska, just to name a few, no mining company of any reputation is going to bother with the security and political risks, let alone the question of where the electricity is going to come from.

    What makes this story “fascinating” rather than contemptible, BR, as your commentary on the corrupt interplay of banks and government usually suggests?

  2. Petey Wheatstraw says:

    Crazy, the lengths humans will go to in order to get gold. Be it grizzly bears and freezing one’s doo-dads off (the Klondike) or venturing into no man’s land (Spanish explorers, and JPM, today), risking life and limb attacking sovereign ships (high-seas piracy of the 17th and 18th centuries), the lust for gold outweighs the risk of getting it.

    Say what you will of its intrinsic value, gold has a long history of high risk for great potential reward.

  3. joeyfishface says:

    Funny, I was just thinking whatever happened to this story.

  4. Global Eyes says:

    Armies have been fighting over minerals for centuries. What this country needs is a war with a good ROI. Gold can provide that.

    Here’s the battle plan: find and extract $14.3 trillion in gold and use it to retire the natonal debt!

    Then progress will become unleashed and the future can begin again.

  5. farfetched says:

    I was thinking about how this is THE story and is always the story.

    We run all around the planet telling everyone we’re not an empire. What total BS.
    We are a serfdom built on gunboat diplomacy and it has always been so. Ever since the nuke it has only gotten worse. Wonder why North Korea wants nukes so badly? Iran? DUH! The neighborhood bully is armed to the teeth and the only answer is bringing a gun to a gun fight.
    We just switch around the buzzwords.
    Today the excuse/buzzword is terrorism.
    Yesterday it was communism, fascism, imperialism, “exploration”, settlement, piracy…..the list of excuses goes on into history.
    The article says gold, but any mineral wealth will do, especially oil.
    We better get busy. While we try the old gun boat method the Chinese are just buying it.
    I wonder….who will look like the good guys in the future? As I recall, appearance is everything.

  6. 873450 says:

    Can anyone identify a first class hotel-convention center in Kandahar where we can sponsor our next venture capital conference?

  7. Lyle says:

    To take Peteys comment a bit further, crossing the US by wagon train in 1849. Discovery of gold seems to lead to dreams of riches in peoples heads leading that that greatest of all get rich quick schemes a gold rush. (Of course most fail at it but…).
    Interestingly if you look at the history of mining in the western us it took the railroads for example to make Butte, MT continue paying once it became a silver/copper play. Comstock did ok, for a while but it continued a while longer than it might otherwise have because of the Central Pacific, and the ability to bring steam engines over the Sierra.
    Anyway the obvious route to bring stuff in is via the northern route, since rails reach the border there. This suggests that russia will make the money on the deal, just like it makes a good bit of the profit on Kazah oil, for transporting it to the Black Sea.

  8. beaufou says:

    http://www.nytimes.com/2010/06/14/world/asia/14minerals.html

    It was a stunning story from 2010, we got there and then, OMG!! look at what we found!

    What a bunch of bullshit, take a little look at the history of mineral findings in Afghanistan:
    http://www.bgs.ac.uk/afghanminerals/docs/Abdullah5.pdf

    And the diagram isn’t exactly a discovery either:
    http://pubs.usgs.gov/of/2006/1038/

  9. JET55118 says:

    I wonder if colonial England had similar maps for the diamond mines in South Africa?

  10. JimRino says:

    This is a great example of “Moral Hazard”.
    Find Gold of any real magnitude, and we will NEVER leave.

    Secondly, Global Eye is doing some wishful thinking.
    Those profits from gold will NEVER reach a taxable entity.
    Just look at GE, and Exxon and Walmart, and Shell and Microsoft and IBM and …

  11. Arequipa01 says:

    Ask yourself what the per ounce cost of production would be for gold mined in Afghanistan. It would be cheaper to work in Venezuela and ole Hugo might just take all your stuff (and still would be cheaper).

    http://settysoutham.wordpress.com/2011/05/05/venezuela-gold-altamente-estrategico/

  12. farfetched says:

    Taxable entity? Choose between Afghanistan and Venezuela? HA!

    This is a game of our corporate/private mob against their corporate/private mob.
    AAMOF, OBL was our hired hit man against the Soviet mob. Then he turned, which is always unhealthy for a hit man. But they do seem to cause some damage before our corporate mob gets their man.
    Our mob never chooses one or the other. They want it all, so they choose all of the above.
    With a few exceptions. It sure was inconvenient when Russia and China got the same big ass gun as we had. That eliminated a lot of resources we could man handle.

    You think you own those resources under your feet? No, we think you should allow our “corporations” in to “develop” OUR resources under your dirt or build that pipeline. No? Better wear a bullet proof vest, a parachute, have a nuke, bluff chemical weapons, have lots of body doubles or a huge maze of tunnels and palaces. and those only buy some time…..
    No? Read the list of dead leaders who ignored the horses head in their bed.
    Somehow there is a huge percentage of assassinations, plane crashes, accidents and coups in central America, the middle east and Africa. If those don’t work we send in the corporate army, hunt them down to their hole in the ground, and have a regime change party in the green zone.
    Hell, these days we don’t even pretend. We even have “private defense contractors” like Blackwater.
    Do they look like mob goons or what?

  13. beaufou says:

    This is a typical adventure of our times.
    Government debt pays for invasion, pays for security and then overpays private contractors to go in and collect, with the blessing of the deficit hawks and the chicken shit brave crowd.
    Meanwhile the out-crowd has to tighten their belts and pay pay pay in the hope of a better day.
    Risible.

  14. wunsacon says:

    The blogosphere has been abuzz for months with rumours of JPM holding significant underwater gold/silver short positions. So, as I read this new story, my imagination is running wild: Are those short positions driving JPM city slickers to search for Karzai’s Gold??

    Why hasn’t Tyler Durden or the “silver bears” gotten a hold of this story?? ;-)

  15. beaufou says:

    “Arequipa01 Says:
    May 12th, 2011 at 1:33 pm

    Ask yourself what the per ounce cost of production would be for gold mined in Afghanistan. It would be cheaper to work in Venezuela and ole Hugo might just take all your stuff (and still would be cheaper).”

    No, it is cheaper to charge the taxpayer in the US for losses and privatize the gains.
    The too big government should only take care of security while the free market corporations who don’t pay taxes collect the benefits and outsource to China.

  16. bobmitchell says:

    China had it right when they stole Tibet.

    You can’t do ANYTHING with those resources until you can get them on a train. That train also has to lead somewhere with power, or to a port.

    Possible routes for that-
    Through China
    Through Pakistan
    Through Iran
    Through all of Asia

    Not gonna happen in this lifetime.