MIDAS Mining Investment and Development for Afghan Sustainability SMEs Assessment Results

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MIDASMining Investment and Development for
Afghan SustainabilitySMEs Assessment
Results

• Presenter Mohammad Ajmal Ahmadzai and Abdul
  Hakeem Montazir

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MIDAS

• The objective of the MIDAS project is to support
  and facilitate the development of the mining
  sector in Afghanistan
• Three components
• Component I Legal and Policy Framework
• Component II Capacity Building of the MoMP
  Employees
• Component III Private Sector Development

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Component III

• Focuses on the private sector development
  requirements which include fostering a strong
  enabling environment for SMEs to support the
  extractives sector. Under Component III a SME
  survey/assessment was administered to identify
  the existence and capacity of SMEs that are
  typically necessary to support the mining sector.
  

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SME Survey Key Focus Areas

• SMEs included
• Business Consulting/ Support Services
• Construction
• Geo-sciences
• Transportation
• Mining operations and community support services
• The interviewees were asked about their views on
  new opportunities and employment expansion
  related to the mining sector

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SME Survey Additional Areas of Focus

• Also included
• Gender assessment which identified the role of
  women in various SME functions
• SME accessibility to financing evaluated
• Inquired on SME supporting mechanisms such as the
  availability of business institutions such as
  Chambers of Commerce and typical business
  regulatory processes (such as if the business is
  registered)
• This information was gathered to provide a
  project baseline and to identify strategic
  interventions that Component III will design and
  implement to support a strong and robust Afghan
  mining sector

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Survey Structure

• Locations
• Bamiyan Hajigak Iron Ore
• Badakhshan Ragh Faizabad Baharak - Gold
• Sar-i-Pul Balkhab Copper
• Parwan Valley - Silver
• Ghazni Zarakhshan Copper and Gold
• Baghlan Qara-Zaghan Gold
• Herat Shaida Copper
• Helmand Chaigi Hills Gold and Copper
• Takhar Samti Gold
• Panjshir Valley Silver

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Survey Administration Details

• 9 Teams of 4 people of which 1 was a women
• On average there were 30 surveys in each location
• 270 survey in total analyzed
• Teams trained in Kabul and in the field

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Key Findings Are.

• Construction The construction area is well
  developed with people having experience in large
  scale construction initiatives, access to good
  equipment, and know-how. We saw that there were
  few applications to the mining area, however,
  with some training, companies could adjust to
  mining needs.
• Transportation - The transportation area is
  fairly well developed but there are many SMEs but
  the scale is smaller than that of the
  construction sub-sector.

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Key Findings with respect to Business are

• The construction and transportation sub-sectors
  would benefit from accounting and business
  training, training to adapt to the mining sector,
  occupational health and safety training, training
  for improving of skills (certifications for
  western investment) to ensure quality standards.
• The business consulting services skill set does
  exist but primarily in places like Kabul. They
  are willing to work in the regions and will do so
  on demand. These are more sophisticated skills
  and could develop over time in the regions when
  there is enough local demand. Support for large
  center or Kabul based companies to train regional
  employees or set up branch offices would be
  useful.

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Key Findings Regarding Community Services Are

• Mining operations and community support services
  do exist, but their level of service and quality
  is lacking. These SMEs will require equipment,
  perhaps through a grants under contract program
  (GuC), technical assistance, training, and
  linkages to markets or demand to really develop
  and prosper.

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Recommendations

• Increased stakeholder awareness and engagement by
  training the following
• What is mining?
• What are the stages of mining?
• What are community needs? How to determine
  these?
• Understanding the role of government
• Understanding your rights
• How to negotiate with mining companies?
• How to promote your region?

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Recommendations

• Access to Finance
• Building the capacity of banks to provide
  products to meet the needs of SMEs in mining
• Dedicate funds for SME development
•  
• Train SMEs to understand their business and apply
  for local forms of financing through business
  planning and other training

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Recommendations

• Access to Technology
• Introduce new technology such as machinery,
  equipment, and tools to increase the efficiency,
  profitability and safety of mining work and
  mining support services.

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Recommendations

• Training
• Improve the capacity of training providers to
  sustainably develop SMEs now and into the future
  to support the growing mining sector of
  Afghanistan.
• Provide on the job training to SMEs to improve
  their use of technology and business know-how to
  increase their effectiveness, efficiencies, and
  profitability.

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Recommendations

• Business Support Services
• MIDAS will help SMEs to create business plans to
  better understand their business and to be able
  to apply for local financing
• MIDAS will promoting an enabling mining
  environment through good policies that support
  the development of the private sector and SMEs to
  contribute to the mining sector
• MIDAS will support SME creation and expansion
  through the provision of improved business
  support services, access to finance and
  technology, and training

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THANK YOU!Questions?