Afghanistan’s extractives industry never achieved its potential, despite years of US development efforts, a US watchdog report concluded.

The US government spent nearly $1 billion to fund critical mineral surveys, mineral exploration, regulatory reforms and capacity development for the former Afghan government, according to the report by the Special Inspector General for Afghanistan Reconstruction, or SIGAR.

“US efforts in Afghanistan’s extractives industry presented one of the greatest opportunities for the Afghan government to generate royalty income, grow its economy, and provide meaningful employment,” the report said. “Nonetheless, multiple factors, including corruption and illegitimate and unregulated mining, hindered Afghanistan’s ability to successfully develop its extractives industry.”

For example, corruption persisted throughout US efforts to develop Afghanistan’s extractives industry and political elites, warlords, military personnel, and the police controlled many mining operations—the former Afghan government estimated that it lost $300 million in revenues annually from illegal mining, according to the report.

SIGAR said that Afghanistan’s challenges in the industry, along with the COVID-19 pandemic, the collapse of the former Afghan government, and the lack of accountability and oversight, impeded sustainable progress in the development of the country’s extractives industry.

The US government estimated the territory of Afghanistan could hold more than $1 trillion worth of mineral deposits, which could be used to generate potentially significant revenue for the Afghan government and support Afghanistan’s economic development.

SIGAR also highlighted that US agencies did not perform required oversight of the programs to develop Afghanistan’s extractives industry.

“In the 20 years of US presence, there was no developmental and infrastructural strategy or plan,” said Shabir Bashiri, an economic expert.

The Islamic Emirate of Afghanistan (IEA) meanwhile has prioritized mining in its bid to boost the country’s economy.

“There has been greater transparency, expedition and biddings in the mining sector since the Islamic Emirate took over. Efforts are ongoing for the extraction of our oil and minerals. Hopefully it will eliminate economic poverty in Afghanistan,” said Sakhi Ahmad Paiman, deputy head of Chamber of Industries and Mines.