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Resource-hungry China heads to Afghanistan

LOGAR PROVINCE, Afghanistan – Early on a recent morning we were driving to a shoot when an astonishing sight loomed up ahead of us. NBC News cameraman Steve O'Neill exclaimed, "It's the Great Wall of China!"

The "wall" snaking before us, easily several miles long, was made of Hesco sandbags and circled a camp for Chinese workers. Though not permitted to enter the site, we could see rows and rows of neat white buildings with blue trim; the temporary structures looked exactly like the migrant workers' housing at construction sites all across China.

Size apart, it was all somewhat unremarkable, except for the fact that we were in eastern Afghanistan.

Image: Hesco sandbags surrounding the Chinese workers camp
Adrienne Mong / NBC News
"It's the Great Wall of China," said NBC cameraman Steve O'Neill when we saw the Hesco sandbags surrounding the Chinese workers camp at the Aynak copper mine in Afghanistan.

The Chinese workers – several hundred technicians – are part of a multibillion-dollar Chinese investment in Afghanistan's largest-ever infrastructure project, the Aynak copper mine.

Discovered in 1974 but virtually dormant since the start of the Soviet War in 1979, the Aynak mine is believed to contain the world's second-largest untapped copper deposits and could propel Afghanistan into the ranks of the world's top 15 copper producers. 

After wooing Afghan officials from as early as 2001, a Chinese mainland joint venture finally won the rights in 2007 to develop the site over 30 years. So far, it has sunk more than $4 billion into the project. 

The joint venture – between majority partner China Metallurgical Group Corp. and Jiangxi Copper Corp. – expects production to begin by the end of 2011 with an initial annual output of 180,000 tons of copper that will eventually grow to 320,000 tons. China will have rights to half that output, which it needs to fuel its own massive economic growth.

But the mine is just outside Kabul, in Logar Province, where there has been heightened insurgent activity. Some 1,500 Afghan police are stationed on site with a new police barracks in the works. And although they say they are not attached to the project, the U.S. Army's 10th Mountain Division occasionally sends units to patrol the area. China – of course, not being a member of NATO – has no troops on the ground in Afghanistan. 

It's this set-up that's feeding a percolating debate about China's role in Afghanistan. 

Adrienne Mong/NBC News
The dormitories housing Chinese workers at the Aynak Copper Mine came from China.

America fights, China profits? 

In making the case for converging U.S. and Chinese interests in Afghanistan, Robert Kaplan wrote last week in a New York Times opinion piece that, "The problem is that while America is sacrificing its blood and treasure, the Chinese will reap the benefits. The whole direction of America's military and diplomatic effort is toward an exit strategy, whereas the Chinese hope to stay and profit."

In the op-ed, titled "Beijing's Afghan Gamble," Kaplan also noted, "China will find a way to benefit no matter what the United States does in Afghanistan. But it probably benefits more if we stay and add troops to the fight." 

No doubt the discussion will boil over after James Yeager, an American geologist, and former congressman Don Ritter, who has an advanced degree in metallurgical engineering and studied in Moscow, hold a press briefing in Washington on Thursday.  The event is provocatively titled, "Report on the Aynak Copper Tender in Afghanistan: How China Won and the West Lost." 

Ritter, now president of the Afghan-American Chamber of Commerce, called the Aynak bidding process flawed and colored by the fact the Bush administration "didn't have the capacity or the competency to understand the importance of [Aynak]." Speaking from his home in the Washington area, he said: "We're giving tens of billions of dollars in assistance to Afghanistan, and we're getting no credit."

Ritter said the report to be presented Thursday was not done under the Chamber's auspices. 

NBC News asked the U.S. Embassy in Kabul for comment, but the mission was unable to provide anyone for us to interview in time for this article.  

Ritter says the bottom line is: "We need a policy on developing mines and minerals and oil and gas in Afghanistan. Otherwise, it will be dominated by Chinese, who are wired to the Iranians through their oil investments, and the Pakistanis, because of the China-India competition."

It all sounds like some postmodernist version of the Great Game, with the players this time being the U.S., China and India instead of Britain, Russia and France. 

But an Afghan businessman who runs a construction outfit subcontracting with the joint venture, MCC-JCL Aynak Minerals Co. (also known as MCC), sees the situation differently.

Adrienne Mong/ NBC News
The Aynak Copper Mine in Logar Province, Afghanistan.

'Poverty is the problem' 

"This project will benefit Afghanistan and bring jobs," said Nurzaman Stanikzai, a 44-year-old native of Logar Province.  His company has been helping build some of the roads at the copper mine as well as the dormitories for Chinese workers. "The American troops should start projects like this copper mine."

In addition to setting up the copper production infrastructure, which includes a smelter, power generation station, coal mine and groundwater system, the Chinese joint venture is also building roads, Afghanistan's first national railway,  new homes for villagers who will be resettled from the immediate area of the mine, hospitals and schools.

Government officials expect the copper mine to earn hundreds of millions of dollars in revenue and royalties as well as provide jobs – direct and indirect – for nearly 40,000 people.

And in contrast to many Chinese investments on the African continent, where Chinese labor is typically brought in, most of the jobs from the Aynak copper mine project are designed to go to the Afghan people.

Under the contract terms, initially some of the workers, including the mine technicians, will be Chinese, but over time training will be provided to the Afghan workers so they can take over more skilled jobs.

"The instability in our country today is due to joblessness. Poverty is the problem," said Stanikzai as he warmed to his theme one afternoon in the spartan comfort of his home in central Kabul. "President Obama should not make a decision to send more troops to Afghanistan. If the U.S. wants to help, it needs to provide more jobs or invite foreign investment into our country."

The trick, of course, is how to court foreign investors while the country is still in the midst of a war.

'They benefit … but we do, too'

When we visited the Aynak copper mine to shoot a story about landmine detection, everywhere we looked security was at the forefront.

We drove through two checkpoints just to get onto the main road leading to the copper mine.  Afghan police manned tents on nearby hills. A green chain-link fence provided the outer limit to the site. And of course there were those huge Hesco sandbags that ring the police camp and the Chinese workers camp.

It turns out those buildings did come from China. Stanikzai imported most of the equipment and materials for constructing the dorms. "This was at the request of the MCC," he said, adding that he would have preferred to contract everything locally because it would have cost less.

But this was Stanikzai's only hint of criticism of Chinese management. Otherwise, he admires China for coming into Afghanistan and rejects charges that it's merely satisfying its voracious appetite for natural resources by exploiting Aynak.

 "The Chinese are not doing this illegally," he said. "They have a contract with the Afghan government. They benefit, of course, but we do, too. We don't have the skills or the companies or the expertise to develop a project like this."

Two of China's bigger telecom equipment manufacturers, Huawei and ZTE, have helped develop cell phone technologies and Internet expansion equipment in Kabul and several other Afghan provinces. In previous years, the Chinese have also been involved in the Parwan irrigation project and rebuilding public hospitals in Kabul and Kandahar. 

China is certainly well-positioned to help develop Afghanistan's infrastructure. In addition to having the experience developing their own vast country, the Chinese have also aggressively pursued opportunities across the African continent, from oil production in Angola and the Sudan, to copper mining in Zambia, forestry in Mozambique, and building roads and railways in the Democratic Republic of Congo.

Security risks

While the Chinese may be benefiting from projects such as Aynak, they also face grave risks. Eleven Chinese construction workers were killed in their sleep by insurgents in Kunduz in 2004. At the time it was the deadliest attack of foreigners in Afghanistan since the fall of the Taliban in 2001. The workers were building a road from the Tajik border to Kabul. 

"Where Chinese companies seem to be building public infrastructure, they're seen as proxies for the Afghan government so they are easy targets," said Ben Simpfendorfer, author of "Silk Road Economy: How a Rising Arab World is Turning Away from the West and Rediscovering China." As a result, "Chinese companies are consistently raising security issues," he said.

How they navigate unsafe waters is also still a work in progress. Though the Chinese are known for investing in troubled or violent countries, particularly in Africa, they are relatively new to Afghanistan.

"[The Chinese government] only wants to negotiate with governments," Simpfendorfer said.  "It doesn't talk to opposition groups or civic groups, so until recently that was very difficult in a place like Afghanistan. That meant there is not a history of engagement there."

While Stanikzai admits insurgents may want to target Aynak, he thinks security does not pose as great a threat as some think. "If you don't have the support of the local villagers and the local community, you can't get security," he said. "But everyone supports this copper mine project."

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