Taliban inherit $ 1 trillion untapped mineral treasure

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Taliban fighters stand guard at a checkpoint in the Wazir Akbar Khan neighborhood in Kabul city, Afghanistan on Sunday, August 22, 2021.
Image Credit: AP

Paris: The Taliban now hold the keys to an untapped treasure trove of trillions of dollars of minerals, some of which could fuel the global transition to renewable energy, but Afghanistan has long struggled to exploit its vast deposits.

The Taliban have already been in financial stalemate since their return to power 20 years after their ouster, as major aid donors halted support for Afghanistan.

Endless wars and poor infrastructure have prevented the country from getting its hands on the metals that could brighten its economic fortunes.

The resources include bauxite, copper, iron ore, lithium and rare earths, according to a January report from the US Geological Survey (USGS).

Copper, which is needed to make electrical cables, has become a hot commodity this year as prices have climbed to over $ 10,000 per tonne.

Lithium is a crucial element in making batteries for electric cars, solar panels and wind farms.

Global lithium demand is expected to increase more than 40 times by 2040, according to the International Energy Agency.

And Afghanistan “rests on an enormous reserve of lithium which has not been exploited to date”, declared Guillaume Pitron, author of the book “The war of rare metals”.

Afghanistan is also home to rare earths used in the clean energy sector: Neodymium, praseodymium and dysprosium.

The country’s untapped mineral wealth has been estimated at $ 1,000 billion by the USGS, although Afghan officials have estimated it to be three times that.

Afghanistan has done better to seek out gemstones such as emeralds and rubies as well as semi-precious tourmaline and lapis lazuli, but the business is plagued by illegal smuggling to Pakistan.

The country also exploits talc, marble, coal and iron.

Investment in China

While the Taliban takeover may deter foreign investors, one country that seems willing to do business with them is China.

The world’s second-largest economy has said it is ready to have “friendly and cooperative” relations with Afghanistan after the Taliban entered Kabul.

The state-owned China Metallurgical Group Corporation won the right in 2007 to lease the giant Mes Aynak copper ore deposit for 30 years and extract 11.5 million tonnes.

Plans to mine the world’s second largest untapped copper deposit have yet to go into operation “due to security concerns,” according to Chinese state tabloid Global Times.

But Global Times quoted a source from the group as saying it “would consider reopening it once the situation stabilizes and international recognition – including recognition by the Chinese government of the Taliban regime -“.

While Chinese leaders are “not enthusiastic” about the Taliban takeover, “they will not allow principles to stand in the way of pragmatism,” said Ryan Hass, senior researcher at the Brookings Institution-based think tank. Washington, in a blog.

“Beijing’s lack of development during its major investment in the Mes Aynak copper mine demonstrates its willingness to be patient in seeking a return on investment,” he wrote.

French expert Pitron said: “The Chinese do not condition their trade agreements on democratic principles. “

He warned that there is no certainty that Afghanistan will become a mineral El Dorado.

“For that you need a very stable political climate,” Pitron said.

It can take up to 20 years between the discovery of a mineral deposit and the start of mining operations, he said.

“No company will want to invest if there is no stable political and legal system,” he said.


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