Chinese mining groups scour Afghanistan for opportunities

Chinese mining groups seek opportunities in Afghanistan to access the country’s lithium and copper deposits as Beijing sinks into the vacuum left by the United States and its allies just months after the Taliban took power .

A group of mining industry representatives have visited Afghanistan in recent weeks, according to a senior official in Kabul and a representative of a Chinese industry association.

China’s efforts to secure mineral rights come as Afghanistan faces an acute financial and humanitarian crisis following the departure of US and coalition forces in August and after leaders in Beijing and the Taliban held sidelines. talks before the US withdrawal.

“China has managed to maintain a direct line of communication with the Taliban since August 2021 and being among the first countries to send aid has definitely strengthened its relationship with the Taliban who are hungry for funding to stabilize the Afghan economy.” said Claudia Chia, an analyst at the Institute for South Asian Studies at the National University of Singapore.

Leading economies are rushing to secure access to lithium and copper, crucial resources used to develop technologies such as electric vehicle batteries and smartphones. Some reports have indicated that Afghan lithium deposits could rival those of the world’s largest known reserves in Bolivia, according to Nomura.

Discussions have been held in recent weeks with the Taliban over access to Mes Aynak, southeast of Kabul, one of the largest copper deposits in the world that Chinese groups previously had a license to mine.

At least one Chinese private sector group has also visited the eastern provinces of Nangarhar and Laghman to seek access to other minerals, according to people familiar with the trip.

But talks were still in their infancy and did not guarantee that Chinese miners would return to mine for Afghan minerals, residents said.

The Chinese industry association said dozens of other companies have asked about the exploration potential of Afghanistan’s resources, including lithium.

Nomura analysts said in a report that as “Tier 1 lithium players” companies would be “unlikely” to be involved in Afghanistan given concerns about environmental, social and governance issues. .

Graph showing the identified global lithium resources

Two Chinese miners mentioned in the report – Ganfeng Lithium, the world’s largest lithium producer, and Tianqi Lithium, one of China’s largest listed lithium miners – have both denied any involvement in the latest trip.

Mining projects in Afghanistan have long faced immense logistical and security challenges. Laghman, for example, is the birthplace and last stronghold of Isis-K, an Isis-inspired militant group fighting a low-level insurgency against the Taliban.

China has expressed concern about the Taliban’s approach to Xinjiang, the western region bordering Afghanistan and where Beijing has kidnapped more than a million Uyghurs and other Muslim minorities.

All mining and production would depend on the Taliban providing security guarantees for Chinese investments, analysts said.

“The Taliban might consider providing security personnel for Chinese projects, similar to what Pakistan has done for CPEC projects,” Chia said, referring to Beijing-backed infrastructure projects in the part of the Sino-Pakistani economic corridor.

“Alternatively, Chinese private security companies, which are already present in Central Asia and Pakistan, could be hired to provide security. . . That being said, security on the ground would still be difficult to manage, ”she said.

China called for the lifting of economic sanctions against Afghanistan and for the Taliban to have access to billions of dollars in frozen foreign exchange reserves held by multilateral financial institutions, including the World Bank and the IMF.

Additional reporting by Maiqi Ding in Beijing

About Kristina McManus

Check Also

Reedy shares soar in US lithium acquisition

Reedy Lagoon shares jumped more than 28% on intraday trading after learning it had expanded …