China was the first country to receive a formal Taliban delegation soon after Kabul fell to the Taliban on 15 August 2019. The Taliban were desperate to befriend China for two reasons.
One was the urgency to obtain much-needed economic support in view of the US having blocked nearly seven billion dollar Afghan assets in foreign banks when the American troops withdrew from Afghanistan post haste. The second reason was that the Taliban wanted to be recognized as the new legitimate regime in Kabul. China’s recognition of Taliban would have been of immense support to the recognition of Taliban regime by many more countries in the world.
But for China, Afghanistan means more than justa new region for strategic manoeuvrings and international diplomacy. This Asian highland country is vastly rich in mineral wealth that has remained untouched so far. The Afghans of all hues have preserved these treasures from the rapacity of industrial czars world over.
The Soviet invasion of Afghanistan in 1979 was conducted essentially with political motivation and was countered by the US again with political and strategic motivation. That, however, is not the case with China which looks at Afghan friendship essentially from commercial viewpoint.
Afghanistan possesses about 1 trillion gemstones and minerals. In the past, Afghanistan produced rubies, emeralds, tourmalines, and lapis lazuli, while it today produces the ever more valuable iron, copper, lithium, cobalt, bauxite, mercury, uranium, and chromium. Despite the importance of these minerals for next-gen technologies, it could take up to a decade for large-scale mining to turn a profit. The Chinese might need to provide the investment and expertise to make this a reality.
However, the Taliban has the chance to exploit the nation’s significant deposits of rare-earth metals and copper. Beijing has notably been open and forward about establishing close ties to its neighbour. Afghanistan’s vast mineral reserves were once valued by its government at as much as $3 trillion – hinting that it could become the ‘Saudi Arabia of lithium.’ Can these crucial resources fuel Chinese industry and production five or ten years from now?
The original USGS analysis, noted as conservative but also preliminary, stated that total copper resources for all known deposits sum to about 57.7 million metric tons valued at about $516 billion. Afghanistan is among the top five nations for copper reserves in the world.
The Aynak core body is located about 30 kilometres southeast of Kabul and contains copper and cobalt deposits worth an estimated $102 billion. There is also $336 billion in iron deposits in the Haji Gak deposit of Bamiyan Province, and significant lithium deposits in Nuristan Province.
There is currently massive global demand for metals, particularly copper, lithium, and rare earth elements, which are essential to the renewable energy and electric vehicle industry.
The reality is that Beijing will need to invest in infrastructure to make mining projects feasible. Afghanistan lacks quality roadways, railways, and electricity. Railway infrastructure is necessary for the transport of ore to foreign markets. There are also environmental concerns about proceeding with such projects.
China has previously faced stiff obstacles to investment in Afghanistan. In the mid-2000s, Metallurgical Corp. of China Ltd. won an almost $3 billion bid to mine copper at MesAynak, near Kabul. Due to security concerns and the discovery of various historical artifacts, progress stalled. Keep in mind, the U.S. still maintains sanctions on the Taliban and can veto any decisions made by China and Russia at the UN Security Council.
Washington already froze nearly $9.5 billion in Afghanistan’s reserves, and the International Monetary Fund cut off 500 million in financing after the Taliban gained control of the country.
However, China is not deterred by what the Americans are trying to paralyse the economy of Afghanistan. Beijing has established the China Town in Kabul from where it conducts trade with Afghanistan and also Pakistan. Previously, China had signed an agreement with Afghanistan for exploring and exploiting the copper mines of Afghanistan. But for some political reasons that agreement could not be implemented on the ground till date.
All this appears a bright picture for the economies of both China and Afghanistan. But the ground reality is that China’s intrusion into Afghan market and especially exploitation of Afghanistan’s mineral wealth is faced with a serious challenge on political front. It is the internal security situation in Afghanistan that is becoming a hindrance to the plans and programmes of exploring the rich mineral wealth of Afghanistan.
Escalating threats from Islamist militants are casting doubt on the future of big-money Chinese mining projects in Afghanistan. Earlier this month, the Nikkei Asia of 19 January wrote that Xinjiang Central Asia Petroleum and Gas (CAPEIC) signed a 25-year extraction oil deal with the Afghan Taliban authorities for the Amu River oil field in north-western Afghanistan. The company is expected to invest $150 million in the first year of the contract and $540 million over three years. China is also reportedly in talks with the Taliban to exploit massive copper reserves in Mes Aynak, 40 kilometres southeast of Kabul.
However, China’s growing economic footprint in Afghanistan is attracting unwanted attention from militants. ISIS-K, the regional affiliate of the Islamic State group in Afghanistan, has stepped up hostile rhetoric against Beijing.
Last September, ISIS-K published an in-depth editorial titled “China’s Daydream of Imperialism” in its Voice of Khorasan magazine. The article warned that China’s pursuit of resources in Muslim lands and its treatment of its own Muslim Uyghur population in the Xinjiang autonomous region could lead to conflict with the group, according to Lucas Webber, editor of Militant Wire, a website analysing militancy.
After the U.S. withdrawal from Afghanistan a year and a half ago, it appears that ISIS-K is finding space to operate freely in the country, and it has begun to make good on its threats against Chinese interests.
In December, ISIS-K claimed responsibility for an attack at a Kabul hotel popular with Chinese citizens. This month, an attack on Afghanistan’s Foreign Ministry was thought to be targeting a Chinese delegation inside, although there has been no independent verification of this claim.
“This is an extremely outrageous terrorist attack, and we are deeply shocked by it,” Chinese Foreign Ministry spokesman Wang Wenbin said of the hotel attack. Saying Beijing appreciated the Afghan security forces’ “sharp reaction,” he added, “We also call on the Afghan interim government to take strong and resolute measures to ensure the security of Chinese nationals, institutions and projects in Afghanistan.” This hotel frequented by Chinese customers was attacked in Kabul in December. ISIS-K claimed responsibility.
In this background Beijing has been insisting on the Taliban to upgrade security of Chinese nationals and business in Afghanistan. Although China has not opened its embassy in Kabul but its footprints in this situation grows it will be analogous to the one with which the Chinese business is faced with in Baluchistan province of Pakistan.