The Taliban’s takeover of Afghanistan could pay off handsomely for the puritanical group. And China is eyeing a share of the fortune.
The Taliban and China are forging a friendship that likely comes down to rare earth minerals.
The Taliban may have been cut off from Afghanistan’s international cash reserves. But it’s sitting on a treasure trove of resources desperately needed to combat climate change.
Kabul, the centre of government in Afghanistan, fell to Taliban jihadists at the weekend. The incredible speed at which it overwhelmed 20 years of Western attempts at “nation building” shocked the world.
Beijing is ready to step into the vacuum.
This week, China’s Foreign Ministry called upon the world to “respect the choice of the Afghan people”. It’s an interesting choice of words.
“The Afghan Taliban has expressed several times that they hope to develop good relations with China, expect China to participate in their rebuilding and development, and will never allow any forces to use Afghanistan’s territory to harm China,” the spokeswoman added.
“We welcome that.”
Taliban fighters travel with weapons mounted on a vehicle in Kabul on August 19, 2021 after Taliban’s military takeover of Afghanistan.
But, as with the wars in Iraq and Syria, there’s more going on beneath the surface.
In the case of Afghanistan, it potentially offers China an overland link to the vital oilfields of Iran. Mountainous terrain makes transport incredibly difficult, but piped oil could reduce Beijing’s fears of keeping its tankers traversing the Malacca Straits.
Equally important are mineral reserves of iron, nickel, copper and gold. These largely untapped resources are potentially an alternative to distant – and non-compliant – suppliers such as Australia.
Mostly, however, it’s about rare earth minerals.
This includes lanthanum (used in bright lights), cerium (polishing and self-cleaning ovens) and neodymium (small magnets).
Just three countries produce more than 75 per cent of the world’s supply of lithium, cobalt and other rare earths. They are China, Congo and Australia. One nation controls 90 per cent of the world’s rare earth processing capability: China.
Beijing has already been using this market dominance in its trade wars with the West.
Rare opportunity
Geologists believe Afghanistan may hold the world’s largest deposits of lithium. This, along with nickel and cobalt, are crucial for modern rechargeable batteries.
Altogether, estimates place their value at anywhere between $1 trillion and $3 trillion.
Such rare minerals underpin efforts to use technology to reverse climate change.
Mining activity is limited in the troubled mountain nation. It does contribute some $US1 billion ($1.4 billion) to the Afghan economy each year. However, analysts say some 30 to 40 per cent of that is lost to corruption and war lord “protection” rackets.
RELATED: China moves in on Afghanistan
Pilgangoora lithium mine near Port Hedland in Western Australia. China will seek rare earth minerals from Afghanistan.
That isn’t likely to change, with corporate investors wary of the risk to their returns.
A Turkmenistan-Afghanistan-Pakistan-India gas pipeline project was suspended in the 1990s with the rise of the Taliban. Work only restarted in 2018. Now, the major infrastructure project is in doubt again.
An international network of hydro-electric power is in peril. As is an Uzbekistan-Pakistan-Kabul-Peshawar railway link.
But Beijing’s state-controlled corporations aren’t answerable to shareholders.
Peace and stability
China’s Ministry of Foreign Affairs says it wants to collaborate with the Taliban in establishing “peace and reconstruction”.
It invited Taliban political leader Mullah Abdul Ghani Baradar to talks in July. He asked Beijing to play a leading role in Afghanistan’s economic reconstruction.
Chinese state-controlled media has ever since been lauding the Taliban as an “inclusive” government capable of establishing “peace and stability”.
Chinese State Councillor and Foreign Minister Wang Yi meeting with Mullah Abdul Ghani Baradar, political chief of Afghanistan’s Taliban, in Tianjin.
It’s already been engaged in talks over the construction of a new road network connecting Xinjiang to Pakistan.
“The key will be the China-Pakistan corridor development that will involve the Taliban-controlled Afghanistan as well,” says Atlantic Council analyst Ariel Cohen.
The Taliban has been amenable.
Taliban spokesman Suhail Shaheen said, “China is a friendly country, and we welcome it for reconstruction and developing Afghanistan … if (Beijing has) investments, of course we will ensure their safety.”
Mr Cohen says that’s just the first step: “It should be no surprise when China becomes a primary financial backer to Taliban-controlled Afghanistan via royalties and taxes paid to accelerate mining projects.”
Neighbourly relations
“On the basis of fully respecting the sovereignty of Afghanistan and the will of all factions in the country, China has maintained contact and communication with the Afghan Taliban and played a constructive role in promoting the political settlement of the Afghan issue,” China’s Foreign Ministry spokeswoman Hua Chunying said on Monday.
“We are ready to continue to develop good-neighbourliness and friendly co-operation with Afghanistan and play a constructive role in Afghanistan’s peace and reconstruction.”
Exactly what form that will take is yet to be seen.
But the Taliban will need to benefit for any project to progress.
“Over time, China would welcome opportunities to benefit from Afghanistan’s rich mineral deposits and incorporate Afghanistan into its Belt and Road Initiative, but it likely has learned from America’s experience that even modest expectations in Afghanistan must be tempered,” says Brookings Institution analyst Ryan Hass.
But Cohen says the Taliban is likely to be in a hurry.
It’s already facing a financial crisis after the US froze its access to $9.5 billion in cash reserves and the international community is suspending aid payments.
“Ample access to natural resources, considerable foreign investment, and trophy Western military equipment will allow the Taliban to build crucial infrastructural and defence apparatuses while threatening others,” he says.
“Whether the Taliban utilises its new-found natural resources for political gain with unsavoury actors, or squanders them through corruption, chaos, and greed – the future of Afghanistan does not bode well for the interests of America or her allies.”