Afghanistan has resources worth $1 trillion or more, including what may be the world’s biggest lithium reserves – provided they can be extracted out of the ground.
Afghanistan, which is now under Taliban rule, has what might be the world’s biggest lithium reserves, as well as other valuable resources.
That was blocked by four decades of conflict, first with the Soviet Union, then amongst warring tribes, and last with the United States. That is unlikely to change anytime soon, with the Taliban already indicating that, rather than leading Afghanistan to a bright future, they intend to reimpose a theocracy that rolls back women’s rights and other basic freedoms.
Over the weekend, Zhou Bo, a senior colonel in the People’s Liberation Army from 2003 to 2020, penned an op-ed in the New York Times, “With the U.S. withdrawal, Beijing can offer what Kabul needs most: political impartiality and economic investment”. He further noted that “Afghanistan, in turn, has what China most prizes: opportunities in infrastructure and industry building — areas in which China’s capabilities are arguably unmatched — and access to $1 trillion in untapped mineral deposits.”
Much relies on what occurs in the next weeks for that scenario to have even a distant chance. Despite the fact that the US is racing to evacuate thousands of Americans and vulnerable Afghans following a hasty troop withdrawal that brought the war to an end after 20 years, President Joe Biden still has the power to isolate any new Taliban-led government on the international stage and prevent most companies from doing business in the country.
The United States maintains sanctions against the Taliban as a whole, and it has the ability to veto any efforts by China or Russia to loosen UN Security Council limits on the extremist group. The United States has already frozen over $9.5 billion in Afghanistan’s reserves, and the International Monetary Fund has halted funding for the country, including roughly $500 million that was set to be distributed around the time the Taliban seized power.
All of this comes at a time when the Taliban are warning the US not to cross its “red line” of the 31st August deadline to withdraw troops and evacuate.
The Taliban have also attempted to establish positive foreign connections, notably with China. A report also notes that “the U.S. is in no position to meddle with any potential cooperation between China and Afghanistan, including on rare earth.”
Afghanistan is economically and strategically important to China. Beijing’s leaders have frequently urged the Taliban to stop preparing terrorist acts against China, and they see strong economic relations as critical to maintaining stability. They also perceive a chance to invest in the country’s mineral industry, which can then be transferred back to China via Chinese-funded infrastructure, which includes $60 billion in projects in Pakistan.
According to Nematullah Bizhan, a former economic adviser to the finance ministry, one of the Taliban’s biggest problems is a scarcity of qualified policymakers. “In the past, they appointed unqualified people into key specialized positions, such as the finance ministry and central bank, if they do the same, that will have negative implications for the economy and for growth in Afghanistan”, he said.
Investors headed by the state-owned Metallurgical Corp. of China Ltd. won a nearly $3 billion bid to mine copper in Mes Aynak, near Kabul, in the mid-2000s. Due to a series of delays ranging from security concerns to the finding of historical relics, no output has been observed, and there is still no rail or power plant.
Nonetheless, few people are hopeful. Targeted executions, ethnic minority massacres, violent protest repression, and Taliban fighters requesting to marry local women have all been reported, which could influence the economic relation between Afghanistan and China.