VZCZCXRO1417
PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #3972 3431409
ZNR UUUUU ZZH
P 091409Z DEC 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 3889
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY 0951
INFO RUCNAFG/AFGHANISTAN COLLECTIVE

UNCLAS KABUL 003972 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR S/SRAP AND SCA/A 
TREASURY FOR LMCDONALD,MNUGENT,JCASAL, AKIFAYAT 
 
E.O. 12958: N/A 
TAGS: EFIN EAID PGOV PREL AF
SUBJECT: Afghanistan's Heavily Indebted Poor Countries (HIPC) 
Completion Point:  Awaiting Mining Sector Reforms 
 
¶1. (SBU) Summary: On December 7, Coordinating Director for 
Development and Economic Affairs, E. Anthony Wayne raised U.S. 
concerns with Afghan Finance Minister Zakhilwal that the Government 
of the Islamic Republic of Afghanistan (GIRoA) may not satisfy the 
mining trigger needed to reach its HIPC completion point by the next 
IMF Board Review (scheduled for January 13).  The mining trigger 
requires that GIROA enact and implement improved mining and 
hydrocarbon regulations and establish a cadastre of mining 
contracts.  GIRoA has completed all of the required actions except 
finalizing and signing the regulations into law.  Zakhilwal told 
Ambassador Wayne that he hoped to bring the mining regulations up 
for cabinet approval next Monday, December 14, following a World 
Bank review.  The Mission is currently following up with World Bank 
staff on the feasibility of reviewing the voluminous mining 
regulations within such a short period of time and, if not feasible, 
options available to ensure an adequate review by international 
parties.  Minister Zakhilwal also requested that the USG provide him 
with any information pertaining to recent allegations against the 
Minister of Mines so Afghans could take forward this investigation 
of charges. End summary. 
 
 
 
OUTSTANDING MINING TRIGGER STANDS IN WAY OF DEBT RELIEF 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶2. (SBU) Ambassador Wayne indicated the U.S. had concerns about the 
issuance of a waiver on the mining trigger, which has been 
recommended by the World Bank and IMF, in light of recent 
allegations in the U.S. press that the Minister of Mines received a 
payment of $30 million during the bidding process for the Aynak 
Copper Mine. (NOTE: Reaching the HIPC completion point would provide 
GIRoA with approximately $1 billion in debt relief.  GIRoA has made 
substantial progress on all of the triggers but failure to satisfy 
the mining trigger may prevent GIRoA from reaching HIPC completion. 
The Mining Trigger requires that GIRoA implement more stringent 
mineral and hydrocarbon regulations.  While the Parliament has 
passed the requisite legislation, the Cabinet has not signed the 
regulations into law.) 
 
¶3. (SBU) Minister Zakhilwal stated his intention to have the World 
Bank evaluate the mining regulations this week, following which, he 
would send them to the Cabinet for review next Monday, December 14. 
He said his hope is that the Cabinet will pass the regulations by 
the end of next week.  Minister Zakhilwal also expressed confidence 
that President Karzai would appoint a new, cleaner, and more 
competent Minister of Mines.  Zakhilwal said he had suggested two 
candidates and Karzai said to him he would go with one of them. 
(NOTE: The Mission has scheduled a meeting with the World Bank's 
Mining Team for December 9 to discuss whether Minister Zakhilwal's 
proposed timetable provides enough time for the Bank to review the 
regulations. End note.) 
 
¶4. (SBU) Minister Zakhilwal tried to allay USG concerns by citing 
GIRoA progress to date on mining reforms.  Pursuant to the mining 
trigger, GIRoA has created a cadastre for mining contracts 
(essentially an information clearing house), enacted the Extractive 
Industries Transparency Initiative, and passed legislation on 
hydrocarbon and mineral regulations.  The only remaining action is 
for the Afghan Cabinet to approve the mining regulations.  This step 
has been delayed due to the reluctance of the current Minister of 
Mines to act affirmatively. 
 
¶5. (SBU) Minister Zakhilwal requested that the USG share any 
available information pertaining to press claims of corruption and 
bribery made against the Minister of Mines with the Ministry of 
Finance so the GIRoA can take its ongoing investigations of the 
allegations forward.  (Separately the Attorney General told the 
Justice attach that his prosecutors needed more 
information/evidence to pursue their investigations.  Zakhilwal said 
his office is currently reviewing approximately 100 of the existing 
177 mining contracts for irregularities.  He has requested the 
others.  Ambassador Wayne promised to follow up on the Minister's. 
(Note: In a subsequent meeting, a World Bank staffer stated his 
belief that the Aynak Copper Mine bidding and contracting processes 
followed the legal procedures and "appeared to be a good deal." 
This did not however preclude the possibility of side payments to 
the Minister of Mines, he said. End note.) 
 
¶6.  (SBU) Comment:  We are following up with World Bank staff and 
their visiting Mining Team on December 9 to ascertain when they will 
complete their review of the mining regulations, which is reportedly 
a 1500-page Dari language document.  We will report this discussion 
by septel.  End Comment. 
 
RICCIARDONE