Here’s Why The Trillion-Dollar Afghan Mineral Discovery Is Bogus

Posted: June 16th, 2010 by Militant Libertarian

from Business Insider

People around the globe are reading widely circulated reports today of a tremendous mineral discovery in Afghanistan. Details are sketchy, but many rare and important metals are mentioned, and a potential value of $1 trillion dollars is mentioned in a New York Times story on the subject. This figure, at best, cannot be anything more than the wildest of guesses.

One does not have to be a geologist or an engineer to understand why. When geologists find outcropping mineralization, or other signs that an economic deposit of minerals may be present, that is not called a discovery. Even if the signs come from the latest scientific equipment flown over the country, as the U.S. government appears to have used, the result is still just an anomaly: a hopeful indication of where to look. And anomalies are like opinions: everybody has one.

Once an anomaly is identified, it takes extensive, and very expensive field work to determine the best locations for drilling holes in the ground, which you have to do to calculate a volume of mineralized rock, from which you can estimate the metal contained. It usually takes at least a year, and often several, to identify targets for drilling. And drilling off a deposit of any significant size takes several more years, usually after many false starts and setbacks, because you can’t see through rock and know where the goods are.

But even after you drill off a deposit, and know how big it is, how deep it is, and roughly what’s in it, you still don’t know what it’s worth. For that, you have to conduct extensive testing on the mineralized material, not just to quantify the metals or other desirable minerals within, but also to see if there are contaminants, or other elements present that can complicate, or even make impossible the economic recovery of the valuable mineral.

In short, until you know how much it would cost to mine and process any sort of mineralized material into a salable product, like gold bars, copper concentrate, etc., you cannot say what it’s worth. Even a huge deposit of gold may be completely worthless, if the grade is low and there’s lots of carbon that would mess up the gold recovery.

Now, back to Afghanistan. A “small team of Pentagon officials and American geologists” cannot possibly have drilled off these deposits, let alone done the engineering required to value them. The NYT article described airborne geophysical surveys and a little surface work – no drilling. This is not a discovery – no serious exploration geologist would call anything a discovery until enough holes have been drilled into it to outline a significant volume of potentially economic material.

What we have here is a regional survey that may or may not lead to significant new discoveries.

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