Sat. May 21st, 2022

Chinese mining groups are seeking opportunities in Afghanistan to gain access to the country’s lithium and copper deposits, as Beijing steps into the void left by the US and its allies just months after the Taliban took power.

A group of mining industry representatives has 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 mining rights come as Afghanistan faces an acute crisis financial and humanitarian crisis after the withdrawal of the US and coalition forces in August and after Beijing and Taliban leaders held talks before the US withdrawal.

“China has managed to maintain a direct line of communication with the Taliban since August 2021 and being one of the first few countries to send aid has certainly strengthened its relations with the Taliban, which is eager for finances to stabilize the Afghan economy, “said Claudia Chia. an analyst at the National University of Singapore’s Institute for South Asian Studies.

Leading economies rush to ensure access to lithium and copper, crucial resources used to develop technologies such as electric vehicle batteries and smartphones. Some reports have said that Afghanistan’s lithium deposits could compete with those of the world’s largest known reserves in Bolivia, according to Nomura.

Graph showing the estimated resources of various commodities in Afghanistan

Talks have been under way with the Taliban in recent weeks over access to Mes Aynak, southeast of Kabul, one of the world’s largest copper deposits previously held by Chinese groups. had a license to mine.

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

But the talks were at an early stage and did not guarantee that Chinese miners would return to tap Afghanistan’s minerals, the people said.

The Chinese Industry Association said dozens more companies had inquired about the potential to explore Afghanistan’s resources, including lithium.

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

Graph showing globally identified lithium resources

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

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

China is concerned about the Taliban’s approach to Xinjiang, the western region bordering Afghanistan and where Beijing has diverted more than 1 million Uyghurs and other Muslim minorities.

Any mining and production will depend on the Taliban securing security guarantees for Chinese investments, analysts said.

“The Taliban may consider providing security personnel for Chinese projects, similar to what Pakistan has done for CPEC projects,” Chia said, referring to Beijing-backed infrastructure projects under the China-Pakistan Economic Corridor.

“Alternatively, Chinese private security companies, which already have a presence in Central Asia and Pakistan, can be hired to provide security. . . That said, security on the ground will still be difficult to manage, ”she said.

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

Additional post by Maiqi Ding in Beijing

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