China faces big risks if it wants to do what no one else has and develop a vast treasure trove of critical minerals in Afghanistan that are more attractive than ever as inputs in the clean energy economy.
Francis Fannon, the State Department’s top energy official in the Trump administration, warned this week that the Taliban’s takeover of Afghanistan could lead to the militant group cooperating with China, which already dominates the critical minerals supply chain.
The Biden administration, like its predecessor, has stressed the importance of reducing dependence on China and increasing domestic extraction, refining, and processing of critical minerals, including lithium.
Afghanistan could represent a big opportunity, said Fannon, who was the assistant secretary at the State Department's Bureau of Energy Resources and now runs a consulting firm focused on geopolitics and the energy transition.
In 2010, the United States discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, including huge amounts of iron, copper, cobalt, gold, and lithium.
An internal Pentagon memo said Afghanistan could become the “Saudi Arabia of lithium,” a key ingredient in batteries, including ones used for powering electric cars and storing renewable energy.
Those resources remain untapped more than 10 years later, as investment decisions were too risky during the rule of Afghanistan’s U.S.-allied government because of logistics and security.
China, on the other hand, is looking to exploit America's messy and hasty exit from Afghanistan and has fewer qualms about operating under conditions that are deemed unacceptable by Western governments and companies.
“Afghanistan has a wealth of mineral resources that is more likely to be developed under Chinese-Taliban cooperation than under the Western engagement there in the past,” said Jane Nakano, a senior fellow in the Energy Security & Climate Change Program at the Center for Strategic and International Studies.
China is a major buyer of minerals as it looks to dominate clean energy manufacturing, leading the world in doing the separation and refinement required to make them usable for batteries and other technologies. Where it lacks access to resources, China also has invested in mining projects abroad, including investing in cobalt mines in the Democratic Republic of Congo.
China and Afghanistan are neighbors, sharing a land border that may cut transport costs, although the terrain is considered challenging to traverse.
“China has a strong capability along the materials supply chains to refine the minerals they may obtain in Afghanistan,” Nakano said.
But the possibility of a partnership is remote and far off, if anything, experts say, as there appears to be too much risk from the perspective of China.
“There is a reason why U.S. companies haven't been involved,” Dave Banks, a former international energy adviser in the Trump administration, told the Washington Examiner. “There is just too much risk there. The question is: Will a Chinese state-owned enterprise, which has a different risk assessment, come in and make this a part of their Belt and Road initiative? I am really skeptical. It's not as if the Taliban has a strong interest in economic development.”
Afghanistan, meanwhile, lacks the infrastructure to do large-scale industrial mining, such as roads, water power plants, and railways, that were damaged by years of conflict.
“If you have a country that is fragmented and unstable, you're not going to see a lot of utilization of mineral resources wherever you are in the world,” said Rod Schoonover, the head of the ecological security program at the Council on Strategic Risks. “It doesn’t seem to me at all that stability will be somehow easier for the Taliban who are inheriting a number of societal and security and humanitarian woes.”
Banks and Schoonover also said China tends to be more pragmatic than it is given credit for and is unlikely eager to work closely with the Taliban.
“Sure, they will take advantage of the U.S. and this blunder of an evacuation, but it’s not like China is rooting for the Taliban,” Banks said.
Nakano suggested China’s risk calculus might vary depending on the type of mineral and its level of scarcity or abundance and market value.
While lithium supply isn't particularly scarce, rare earth elements are harder to find.
Tristan Abbey, the president of Comarus Analytics, a consulting firm that focuses on critical minerals, said he expects many countries, such as China, Iran, and Pakistan, to be interested in developing Afghanistan’s vast critical mineral resources, though it will take time and depend on the security situation.
He noted that most of what we know about Afghanistan’s critical minerals came through surveys from the United States Geological Survey, and he rued that the U.S. never got the chance to develop them.
“The United States was doing basically nothing to access these minerals, so it’s not like we’re losing a bird in the hand,” Abbey said. “The sad reality is that whoever does end up extracting the minerals will probably be using public U.S Geological Survey data, collected in wartime conditions by courageous American geologists.”
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