November 27, 2014

Afghanistan the “Saudi Arabia of lithium”

By Ghanizada - Tue Aug 13 2013, 1:42 pm

Afghanistan the Saudi Arabia of LithiumThe Afghanistan’s natural resources are considered to be a silver lining for the economy of Afghanistan, as the NATO-led international coalition
security forces are preparing to leave the country.

The withdrawal of the NATO troops and reduction of international community’s aid to Afghanistan has created fears of economic crisis among the Afghans, however, there are optimisms that the natural resources of Afghanistan could play a vital role in economic development of the country.

U.S. agencies estimate Afghanistan’s mineral deposits to be worth upwards of $1 trillion. Afghanistan’s copper, cobalt, iron, barite, sulfur, lead, silver, zinc, niobium, and 1.4 million metric tons of rare earth elements (REEs) — may be a silver lining.

A classified Pentagon memo called Afghanistan the “Saudi Arabia of lithium.” (Although lithium is technically not a rare earth element, it serves some of the same purposes.)

Jim Bullion, who heads a Pentagon task force on postwar development quoted by The American said, the maps reveal that Afghanistan could “become a world leader in the minerals sector.”

There are optimisms that Afghanistan’s mineral wealth may be able to help knit the country back together after decades of war, having Rare Earth Elements (REEs), which are high in demand.

The REEs are are essential to the manufacture of a host of modern technologies, including cell phones, televisions, hybrid engines, computer components, lasers, batteries, fiber optics, and superconductors.

According to the American, congressional findings have called rare earth elements “critical to national security,” and understandably so. REEs are key to the production of tank navigation systems, missile guidance systems, fighter jet engines, missile defense components, satellites, and
military grade communications gear.

Currently, China is considered to be one of the major suppliers of Rare Earth Elements, and produce 97 percent of the world’s REEs. However, the global market has reportedly been manipulated by China.

The overall exports of REEs were reduced to 72 percent in the second half of 2010 following a maritime dispute with Japan, and China stopped supplying REEs to Japanese customers.

There optimisms that Afghanistan can be part of the long term solution to the REE supply problem in the long term. However, concerns regarding the corruption and security remains a challenge.

The rule of law, human capital, and infrastructure which are critical to attract foreign investment is yet another challenge, which prevents to build a rare earth mining system from scratch in the short term.

In the meantime, china is considered to be a vital player and can play an important and constructive role in Afghanistan, as the country is is eager to develop Afghanistan’s mineral wealth.

China is one of the major foreign investment in the mining sector of Afghanistan, it has so won exploration rights for copper, coal, oil, and lithium deposits across Afghanistan.

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