News headlines and social media content about current events in Afghanistan are relentless. The focus being botched policy, failed intelligence and the desperation of locals to flee the country.
While the world devours these distractions China is eyeing one of the world’s largest mineral reserves – it is estimated that Afghanistan’s resources hold value of anywhere between US$1 trillion and US$3 trillion. Vast reserves of gold, platinum, silver, copper, iron, chromite, lithium, uranium, and aluminium are waiting to be exploited. In addition, high-quality emeralds, rubies, sapphires, turquoise, and lapis lazuli have long charmed the gemstone market.
The United States Geological Survey (USGS) has concluded that Afghanistan may hold 60 million metric tons of copper, 2.2 billion tons of iron ore and 1.4 million tons of rare earth elements (REEs). Initial analysis at one location in Ghazni province indicates the potential for lithium deposits as large as those of Bolivia, which has the world’s largest known lithium reserves. The USGS also estimates the Khanneshin deposits in Helmand province can yield 1.1.-1.4 million metric tons of REEs.
Earlier this week Shamaila Khan, director of emerging market debt at AllianceBernstein, told CNBC’s Squawk Box Asia that the Taliban insurgents have emerged with resources that are a “very dangerous proposition for the world.”
“It should be an international initiative to make sure that if any country is agreeing to exploit its minerals on behalf of the Taliban, to only do it under strict humanitarian conditions where human rights, and rights for women are preserved in the situation,” she added.
China already dominates the global rare earths market. It is also a mining heavyweight, producing 120,000 metric tons or 70% of total rare earths in 2018.
China’s economic profile in Afghanistan has been subdued, when compared with its image elsewhere. A report by the US Brookings Institute in 2020 noted, “China’s economic investments in Afghanistan remain small and well below their potential.” But this is sure to change as the country has already announced it will more than likely recognise the Taliban as the official leadership of the country.