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Afghanistan sees great white hope in marble sector
HERAT, Afghanistan |
HERAT, Afghanistan (Reuters) - Afghan businessmen are confident that with new anti-corruption measures and foreign investment, they can carve out a lucrative industry from one of Afghanistan's most abundant natural resources: marble.
Devastated by three decades of almost uninterrupted conflict, Afghanistan's crumbling infrastructure prevents many of its large mineral and gem deposits from being explored and keeps production to a tiny scale, catering primarily for the domestic market.
Some experts estimate billions of metric tonnes of the stone lie untapped across Afghanistan, making it a resource the Afghan and U.S. governments are aggressively marketing as potentially the country's most profitable sector.
"The resources are enormous. The job potential is in the thousands, export potential is in the millions (of dollars)," said Paul Lamoureux, a stone consultant working with the U.S. government's aid agency, USAID.
Lamoureux, who has worked in Afghanistan's marble sector since 2008, said in 10 years the industry could be close to producing $700 million in exports, equal to more than 6 percent of current GDP.
That's more than the United Nations believes Afghan farmers now earn from the country's most famous export: illicit opium processed into more than 90 percent of the world's heroin.
According to the head of the Herat Industrial Association, Alhaj Touryalai Ghawsi, Herat province in western Afghanistan, exports $3 million of marble each year. Ghawsi hopes that figure will more than triple to $10 million by next year.
This month, Afghanistan hosted its largest ever conference on the marble industry in Herat city, capital of Herat which holds the lion's share of Afghanistan's marble deposits.
Gleaming white lion sculptures and perfectly cut slabs of sparkling granite were on display for some 200 attendees, including potential buyers from Italy, India, China, Iran, Turkey and Turkmenistan.
Lamoureaux is particularly enthusiastic about Italy's interest in Afghan marble and it is a market Afghan suppliers are keen to capture. Most of Afghanistan's marble is currently exported to Turkmenistan, China and India.
Lamoureaux likened the quality of white Afghan marble to Italy's own legendary Carrara variety, prized by builders and sculptors since the time of ancient Rome. That has attracted much interest from Italian buyers, he said.
Unlike many businesses in Afghanistan that blame poor security as their main obstacle to expansion, those in the marble industry say it is bad government policies, corruption and crumbling transport infrastructure that have held them back.
Afghan businessmen who have invested heavily in marble quarries have complained in the past about the conduct of the Ministry of Mines and about government practices like applying extortionate and arbitrary royalty fees on extracted marble.
Those in the industry say they are hopeful things will change after the former mines minister was removed by President Hamid Karzai in a cabinet reshuffle this year.
Nasim and Adam Doost, two Afghan-American brothers who own Afghanistan's largest marble business, Equity Capital Mining, have plowed $10 million into their marble quarrying and production company.
After four years they have yet to make a profit. But despite the spiraling costs, insecurity, bureaucratic headaches and poor infrastructure, the Doost brothers remain committed.
"Over the past four years, 20 marble factories have opened in Herat, employing 20 people each," Adam said. "At that rate of growth over the next five years we're looking at least 40,000 employees."
Frustrated last year by what they felt were unfair contractual terms from the Ministry of Mines that discouraged investment, Nasim and Adam say they have a strong relationship with the new minister who has agreed to introduce changes.
"He is trying to cut the taxes," Nasim said. "He is trying to help build more factories so that we can provide more jobs. The door is now going to be opened for more investors."
Adam said the brothers' goal is to raise production capability to 15,000 tonnes a month over the next few years.
Removing administrative and legal obstacles goes only so far in improving the investment climate for marble. The overriding challenge for the Doost brothers is bad roads.
They have recently built a new state-of-the art cutting and processing factory with machinery bought from Italy, but it cannot reach its potential unless there are good connecting roads nearby to transport their products to buyers.
"The most important thing is the roads, without a road none of this can really work," Nasim said.
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