Page 30 - bne magazine September 2021_20210901

30 I Afghanistan falls to the Taliban bne September 2021
Afghanistan has a treasure of minerals in the ground worth up to $1 trillion. China will be well positioned to develop the deposits for the cash-strapped new Taliban government.
Can China tap Afghanistan’s lithium treasure?
and cobalt (magnets, special alloys), niobium (supercapacitors, superconductors) and various rare earth metals have been confirmed.
In short supply
Rare earth metals are in short supply with China currently controlling about 80% of global production.
With the rise of the digital economy, these esoteric elements have grown
in importance and are becoming a strategic resource. Securing large deposits outside of China is of major interest to global producers, making it equally important for Beijing to secure production deals with Afghanistan.
But there are many hurdles to clear before Afghanistan can start large-scale mining operations. First is the fact that the deposits of unrecovered lithium and copper are nothing more than clay brine and crushed stone making extracting the minerals technically difficult.
Then there is the complete lack of infrastructure and exorbitant investment risks as well as unrestrained corruption and physical security issues due to
the tribal nature of Afghan society.
Afghanistan already has some limited mining operations such as the Taliban- controlled artisanal mining of lapis
Cameron Jones in London
War-torn Afghanistan has hundreds of millions of dollars of hard-to-find lithium deposits in dusty ground. Following the Taliban sweeping to an effortless victory to take control of the country, its neighbours are already hungrily eyeing the resource.
Lithium has come into focus as it
is a key element in the production
of batteries, demand for which is expected to soar in the coming decades on the back of the electric vehicles (EV) revolution that is under way.
China is already a major home and producer of rare earth metals and potentially the business partner that the Taliban can turn to. Beijing already reached out to the Taliban leadership in July, well before the collapse of
the US-backed government in Kabul, and has been one of the few great powers to have kept its embassy in the Afghan capital open in recent days. However, China's previous attempts to develop the Afghan subsoil have so far ended in failure.
The New York Times famously reported in 2010 a Pentagon assessment of the Afghanistan's mineral wealth estimating
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it at $1 trillion and called the country the "Saudi Arabia of lithium."
This story was based on a 1980s Soviet geological survey, itself excavated
in 2004 by the Americans from the Afghan archives. Based on these materials, a US Geological Survey
“The New York Times famously reported in 2010 on Afghanistan's mineral wealth estimating it at $1 trillion and called the country the "Saudi Arabia of lithium”
and then the Pentagon's group on business projects in the controlled territories conducted research and compiled a report, subsequently quoted by the New York Times.
It is possible that the lithium reserves in the soda salt marshes of Ghazni and neighbouring provinces are even larger than the reserves of Bolivia, the current world leader in lithium. In addition, huge (2.2bn tonnes) reserves of high-quality iron ores, copper (60mn tonnes), neodymium
lazuli, a blue semi-precious stone, which is worth $20mn per year.
In total, the Taliban earned $400mn in revenue from the exploitation of the country's resources in 2020, much more than the American-backed government produced. If professional and large-scale mining were launched in Afghanistan, the potential revenues could rise rapidly.
High on the agenda of the new Taliban government that the fundamentalists are in the process of forming will be