Fi�hReconciliation Report

Infographic

The mining sector in Afghanistan has the potential to generate major government revenue for the country and

is recognised as a valuable source to develop the national economy.

Implementing the EITI Standard will ensure transparency and bring significant benefits to public financial

management, improve the investment environment and manage the potential risk of conflict due to

dissatisfaction over sharing the wealth between the Government and resource owners. Afghanistan‘s natural

resources should benefit all Afghans through tax revenue, infra-structure development and employment.

In countries implementing the EITI standard, companies are required to publish what they pay to

governments and governments are required to publish what they receive from companies. These figures are

then reconciled by an Independent Advertisement. The process is overseen by a multi-stakeholder group in

each country.

All facts and infographics statistics outlined in the fi�h Afghanistan Extractive Industries Transparency Initiative which includes the 2014-2015 years.

AFGHANISTAN EXTRACTIVE INDUSTRIES TRANSPARENCYINITIATIVE ( AEITI )

1

Afghan Government

Private sector in the extractive industries of Afghanistan

have 18 members�e government has 6 members

(3 members of the Ministry of Mines, 2 members of the Ministry of Finance and 1 member Ministry of Commerce and Industry)

Civil Society 6 membersPrivate Sector 6 members

Multilateral Group (MGS)

Afghan civil society (NGOs and institutions active in the Afghan mines sector)

Citizens of Afghanistan

Government of Afghanistan

Domestic and foreign investors

2

1

2

3

AEITI Secretariat�is secretariat coordinates government e�orts to meet the AEITI benchmarks and provides technical and administrative cooperation to the MSG Multilateral Group.

Independent Advertisement�e agency is recruited in accordance with the AEITI standards by the Afghan government to prepare the AEITI report, which includes the integration of income figures for improving country's progress in implementing EITI requirements and improvements made in the commercial sector.

People who benefit from the transparency of mines extraction

LEGEND

3

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4

Better opportunities for Extractive industry

of domestic and foreign investors

Creating sustainable development

Allocating extractive industries to economic infrastruc-ture that involves continuous development.

Good Governance

�e publication of AEITI reports will provide transparency in the Mining sector

Increase of revenues forthe Afghan government

Report Publication for Public Awareness

BENEFITS OF PUBLISHING THE AEITI REPORT

Inhibition of corruption

Transparency guarantee

Five percent of the state revenue collection from each mine is allocated to the development of local communities to any province where the mine is located.

All natural Resources are exclusive property of the

Afghan State

Estimated value of Afghanistan’smineral resources

According to the 2010 survey of United States of America

(USGS) Geology Authority the value of Afghanistan's natural

resources estimates to be between $ 1 to 3 trillion USD.

Minerals and Metals Gemstones

AL ZNAU HGLACE NDEU HODY GD LUER

PR YSCPM SM TB YBTM

Oil

Emeralds

Lithium

Pegmatite

Tin Talc

Other Metals Rare Earth Elements Radioactive Minerals

Sand Gravel

Lapis lazuli Barite

Aluminium

Industrial Mining

Rare resources

Gold

Silver Salt Sulphur Rubies

Mica Marble Magnesium Magnesite

Lead

Iron

Graphite Fluorite

Copper

Coal ChromiumGas

5

5

MINERAL RESOURCES AVAILABLE IN AFGHANISTAN

�ese are hydrocarbon resources, metals, industrial metals, precious and semi-precious stones, elements of silver and construction materials.

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6

7

MINERAL RESOURCES OF AFGHANISTAN

Gas

Estimated digits measured by the United States of America (USGS) and Afghanistan (AFG) Geological Survey.

Natural Gas LiquidsCrude Oil

0.8 billion metric tons0.2 billion metric tons 0.4 trillion cubic meters

Coal, GemstonesRare ElementsPrecious Metals Gemstones

Industrial mineralsIron oreCopper

Afghanistan’s mineral resources include Precious metals, Rare elements, Coal, gemstones, Copper and Iron ore, as well as Industrial minerals. �ese resources are largely undeveloped.

CementMetric ton

2009201020112012201332,00036,00038,00037,00040,000

ChromiteMetric ton

200920102011201220137,00066,0006,0006,000

Coal, bituminousMetric ton

20092010201120122013500,000275,000750,000780,000936,000

FertilizerMetric ton

200920102011201220137,0006272,000250,000242,000

Gasgross million cubic meters

20092010201120122013142142142161160

20092010201120122013140140142145141

Gasmarketed million cubic meters

GypsumMetric ton

2009201020112012201346,00063,00062,00057,00057,000

20092010201120122013128,000128,000128,000130.000130.000

LimeMetric ton

MarbleMetric ton

2009201020112012201327,00029,00029,00045,00067,000

2009201020112012201322,00027,00027,00050,00076,000

Nitrogengross million cubic meters

Petroleumgallon barrels

2009201020112012201316464,00064,00080,00068,000

20092010201120122013180,000186,000186,000147,000145,000

Salt, rockMetric ton

8

MINERAL INDUSTRY EXTRACTED

Licenses issued to extractive companies

Specialty license

Exploration License

Exploitation License

Small Scale Mining License

Artisanal Mining License

Persons who cannot extract mines

Afghan Gas Enterprise Northern Coal Enterprise

201420152.3 Million2.1 Million

201420150.3 Million1 Million

�e license for exploration is valid for 3 years a�er being registered with the Mines Registry O�ce

and can be extended for 2 periods.

�e maximum period of validity of the mining permit is 25 years.

9

High ranking state o�cials

Magistrates

Members of the Armed Forces

Police and the Security services

Government employees

Members of the Parliaments

MINERAL RESOURCES EXPLORATION AND EXTRACTION STAGE

GOVERNMENT OWNED ENTERPRISES

Mine Contracts

Large Mines contracts are for 25 years. Small Mines contracts are for 10 years.

�e new mining law was signed by the President in

August 2014 to improve this sector's management

and investor confidence building.

�e Mines Act of 2014 states that no one can perform mining activities unless it has been licensed by the

Ministry of Mines and Petroleum.

According to the 2010 regulation, tenders and bids for

mines contracts will be published in the Ministry of

Mines and Petroleum website, national and interna-

tional media both in national and English languages.

10

THE PROCESS OF GRANTING PERMISSIONS

BIDING OF MINING CONTRACTS

Water Supply Agreement

Railway Agreement

Anyak Copper contract

Mineral Agreement

Power Supply Agreement

Security Agreement

5

6

1

2

3

4 November، 2009

April، 2008

June، 2009

February، 2009

February، 2009

July، 2009

Contract

MOM Amu Darya Process and Transparency Review

Sanduqli Block of Afghan-Tajik Basin

Mazar-e-sharif Block of Afghan-Tajik Basin

1

2

3 October 8، 2011

Signed

October 26، 2011

October 8، 2011

Copies of documentation associat-

ed with Amu Darya, Sanduqli and

Mazar-e-Sharif Hydrocarbons

contracts

Holders of mining rights must file their financial

statements in accordance with the Afghan Tax

Code and other relevant laws or in accordance

with the International Accounting Standards

issued by the ( IAS ) Board.

FINANCIAL REGULATIONS

�e Ministry of Finance is the only competent

authority to collect tax and customs revenues.

�e Ministry of Mines and Petroleum can collect

non-financial revenues from natural resources.

�e royalty rate is debatable.

Contractors are required to pay royalties for gas

production in accordance with the laws and

regulations.

1

2

3

11

Copies of documentation associated

with the Aynak Copper contract

12

Ministry of Finance - Revenue

Ministry of Mines and Petroleum

Ministry of Finance - Customs

Government owned enterprises

Ministry of Finance - Customs

Ministry of Finance - Revenue

Large Taxpayers Chairmanship

Medium Taxpayers Chairmanship

Small Taxpayers Chairmanship

2

1

Cadastre Chairmanship

Ministry of Finance - SOE department

=Ministry of Mines and Petroleum

Revenue Chairmanship

3

4

SOE department

Government entities included reports

MINE REVENUES FOR AEITI REPORTS

Transport revenues

13

Non reporting companies

Mahmand Shamal Enterprise

Mohammad Faisal Enterprise

Lajawardin Enterprise

Ayzeen Central Mining Services Enterprise

1

2

3

4 Dragon Oil Sanduqli Enterprise

Shamsheer Zameer Enterprise

Turkish Petroleum Enterprise

Dragon Oil Enterprise (Mazar-e-Sharif)

1

2

3

4

No Contact details Companies not Report

Hashimy Group Enterprise

Belal Mosazai Enterprise

Khushak Brothers Enterprise (Herat)

Misaque Sharq Enterprise

Lajawardin Enterprise

Afghan Gas Enterprise

Northern Coal Enterprise

CNPCIW-Watan Oil & Gas Afghanistan Ltd

Amin Karimzai Enterprise

9

5

6

7

8

1

2

3

4 AIC (Cement Ghory) Enterprise

Dragon Oil Enterprise

Dragon Oil Enterprise (Mazar-e-Sharif)

Marajuding Shams Enterprise

Turkish Petroleum Enterprise

Shamsheer Zameer Enterprise

Technologist Enterprise

Afghan Coal Enterprise

MCC Aynak Mineral Enterprise

18

14

15

16

17

10

11

12

13 Wistco International Enterprise

Amaniya Minning Enterprise

Humayon Enterprise

Shair Parwan Enterprise

Mahmand Shamal Enterprise

Pameer Khorasan Enterprise

Ayzeen Central Mining Services Enterprise

Mohammad Faisal Enterprise

Afghan Investment Enterprise

27

West Land General Traiding (Norabah)28

23

24

25

26

19

20

21

22

PRIVATE SECTOR REPORTING FOR AEITI

Extractive companies include the fi�h report

14

Government receipts

Gov Bank

Ministry of Finance

Ministry of Finance - Customs

2012 2013 2014 2015

Ministry of Finance - SOE department

Ministry of Mines and Petroleum

Total in Afghani

Total in Dollar

117.5

9.10

1,247.70

2,567.40

3,941.70 Million

59 Million

280.20

4.80

383.10

581.30

1,249.40 Million

18.5 Million

157.70

1.40

804.60

856.80

1,820.50 Million

27 Million

122.10

5.20

2,099.50

583.20

2,810.00 Million

42 Million

To this end, the Multilateral Group of MSG has

set out a map to be implementing by 2020,

.Afghanistan

According to the EITI criteria for 2016, companies that participate in bidding operations and

extractive investment in Afghanistan are required to disclose their main Owners.

BENEFICIAL OWNERSHIP

15

We recommend that government departments

and authorities establish a proper process and

system for the physical records of the documents

and files, and provide training to their employees

in connection with the importance of maintaining

these systems. �e assistance of professional

people should be taken into consideration so that

their experience and performance in other

countries can be practiced.

We observed that progress has been

made regarding some of the recom-

mendations for setting up the Ministry of

Finance and reconciliation between the

Ministry of Finance and the Ministry of

Mines and Petroleum, however, there is

insu�cient progress to avoid repeating

the recommendations of the fourth

report.

We recommend that the responsibility of

all taxpayers of large mining, oil and gas

extractors be transferred to the Ministry

of Finance's Large Taxpayers' O�ce.

�e Ministry will ensure that it has all the

details of the records and transactions of

the companies concerned.

We recommend that the O�ce of

Large Taxpayers of Ministry of

Finance, and the Ministry of Mines

and Petroleum arrange and maintain

a list of all major mining companies,

oil and gas companies, so that each

ministry have a combination list of

companies, licenses, and tax

identification number (TIN) of each

Taxpayer

We recommend that the computerized systems

of computing information for the Ministry of Mines

and Petroleum and Customs Department of the

Ministry of Finance be identified and bearing in

mind the responsibility of the above points, a�er

approval by the competent authorities of each

ministry, by providing continuous and appropriate

training for the sta�. , be implemented.

�e multilateral group should transfer these recommendations through the Ministry of Finance, the Extractive

Industries Transparency Initiative to the Government, and pursue the response and progress of the government

to report to the next Reporting Meeting of the Extractive Industries Transparency Initiative.

Keeping Records

Financial Systems of Ministry of Mines and Petroleum

Guarantee Government Reporting

Significant recommendations of the Fourth Report

AEITI REPORTING COMMENTS

�e Extractive Industries Transparency Initiative ( AEITI )

Design and Illustration: Suhail Mayelsuhail.mayel@gmail.com

+93 (0) 775 008 132

Fi�h (5) Reconciliation Report Infographic

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