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It’s Only A Matter Of Time Before China Makes A Move On Afghanistan

While the world looks on with growing concern at the political play unfolding in Afghanistan with the takeover of the Taliban, another sidebar to this developing story that is slowly creeping into public consciousness is the vast treasure-trove of minerals in that country, and how the Taliban government will exploit it.

One estimate by the U.S. Geological Survey (USGS) given years ago had pegged the worth of Afghanistan’s untapped mineral resources at U.S. $1 trillion. Some Afghan officials have said the actual figure could be three times more.

Afghanistan’s mountains contain a wide range of critical resources, including copper, gold, oil, natural gas, uranium, bauxite, coal, iron ore, rare earths, lithium, chromium, lead, zinc, gemstones, talc, sulphur, travertine, gypsum, and marble.

However, even before the U.S. entered its borders 20 years ago, Afghanistan had struggled to tap those reserves.

Two decades later, the situation is not very different.

During its time in the country, the U.S. did not get into the mining of these metals and minerals because of the high risks.

Now, with the Taliban in control, it remains to be seen how it will use these resources to its advantage. What makes these resources especially attractive to countries like China and Russia is the fact that some of the minerals could power the transition to renewable energies in the future.

Afghanistan rare earths

For example, lithium is a crucial element to make electric car batteries, solar panels and wind farms.  The International Energy Agency forecast global lithium demand will grow by over 40 times by 2040.

In a 2010 memo the U.S. Department of Defense described Afghanistan as “the Saudi Arabia of lithium,” Reuters reported. As such, the country could be as important for the global supply of the battery metal as the Middle Eastern country is for crude oil.

As of the time of the comparison, lithium batteries were already widely used for electronic devices. However, it had not yet become apparent how much lithium would be needed for electric vehicle (EV) batteries and the transition to lower carbon emissions across industries.

A USGS 2017/18 report noted that Afghanistan had deposits of spodumene, a lithium-bearing mineral, but failed to provide estimates of its tonnage. The 2019 Afghanistan report made no mention of lithium at all.

But records show that Afghanistan does, however, hold 1.4 million tons of rare earth minerals, a class of 17 elements widely used in consumer electronics and military equipment.

Copper

Copper is another commodity that is in Afghanistan. Despite the recent drop in prices, with prices soaring to more than $10,000 per metric ton earlier this year, that’s another attractive proposition for the new rulers.

Chinese companies signed contracts to mine one of the world’s largest untapped copper deposits in Afghanistan about 10 years ago, in a sparsely populated area of Logar province, about 40 kilometers southeast of Afghanistan’s capital, Kabul.

In 2007, China Metallurgical Group Corporation had leased the giant Mes Aynak copper ore deposit for 30 years, taking out 11.5 million tons of copper from it. Mes Aynak, meaning “small copper deposit” in Dari, is a large deposit with an estimated value of $50 billion (317 billion yuan) based on earlier estimates. However, not much came out of these efforts.

Taliban and China

Although the Taliban’s takeover may deter foreign investors, China and Russia could be willing to do business with them.

Following the Taliban’s entry into Kabul, China said it was ready to have friendly and cooperative relations with Afghanistan.

As part of its efforts to dominate clean energy manufacturing, China has become a major buyer of minerals. It is also leading the world in separating and refining them to make them useful for batteries and other technologies. China has also invested in mining projects abroad, including cobalt mines in the Democratic Republic of the Congo.

Francis Fannon, who served as assistant secretary of state for energy resources during the Trump administration, warned it might be a matter of time before the Taliban began cooperating with China, which already dominates the vital minerals supply chain.

Jane Nakano, a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies, was quoted as saying that Afghanistan had a wealth of mineral resources that was more likely to be developed under Chinese-Taliban cooperation than under the Western engagement there in the past.

By AG Metal Miner

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  • Mamdouh Salameh on August 26 2021 said:
    When the U.S. Geological Survey (USGS) says there are untapped minerals in Afghanistan, then there are. However, without a comprehensive assessment, it is hard to put a price on Afghanistan’s mineral resources. Until this is done, nobody can claim that the value of the country’s mineral resources are worth $1 trillion.

    What makes me doubt that figure is that the United States which stayed in the country for more than 20 years didn’t arrange for American mining companies to establish a presence in Afghanistan and tap these resources whilst there.

    Both China and Russia have all the minerals they need and in abundance. Therefore, the mineral wealth of Afghanistan might not be the factor that will attract them to Afghanistan. It is the geological factor.

    Russia and China are destined to gain a lot of geopolitical influence as a result of the US withdrawal from Afghanistan. For Russia, the US withdrawal means one less location close to Russia where Washington used to have a formidable military deployment. Making friends with the Taliban regime could ensure that it won’t foment trouble and spread terrorism to the neighbouring Islamic republics of the former Soviet Union such as Tajikistan, Turkmenistan and Uzbekistan and even Russia. However, to pre-empt such eventuality, Moscow has quietly built up its diplomatic ties with the Taliban for several years now. In fact, Russia may have been preparing for this eventuality for years.

    For China, Afghanistan will soon come under its thump via aid and soft loans provided under the Belt and the Road Initiative (BRI) particularly with Western financial organizations blacklisting the country and the currency in freefall. In return, China will ensure that the Taliban won’t stir up trouble among the Muslim majority (the Uyghurs) in China’s XinJiang region in the north west of the country.

    Another factor is that China could establish another corridor connecting it to Pakistan through the territory of Afghanistan. China already shares borders with Pakistan so another corridor will strengthen its alliance with its ally and eventually Afghanistan.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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