Chinese miners are looking at Afghanistan’s $ 1 trillion mineral reserves

(Bloomberg) – Chinese companies are showing interest in exploiting Afghanistan’s vast untapped mineral resources, while Beijing is seeking a role in rebuilding the nation’s war – torn economy.

Afghanistan sits on deposits estimated to be worth $ 1 trillion or more, including what may be the world’s largest lithium reserves, a vital component of the energy-saving batteries that drive the world’s transition away from fossil fuels. The opportunity in Afghanistan comes after the United States, China’s major geopolitical rival, ended its two-decade-long military presence in the country earlier this year.

Taliban government officials recently met with representatives of five private Chinese companies to discuss mining in the country, according to the Afghanistan Chamber of Commerce and Investment. The companies showed “strong interest” in the country’s mineral deposits as well as the construction and agricultural sectors, Khanjan Alokozay, a senior member of the chamber, said by telephone.

China is both the world’s largest consumer of minerals and a long-term investor across many of its Asian neighbors through President Xi Jinping’s signature Belt and Road initiative. To secure its supply of raw materials, Beijing has shown a willingness to invest in some of the world’s most volatile jurisdictions, including nations in Africa and South America.

Lithium visit

China’s interest has the support of the Taliban government, Alokozay said. The militant group is seeking foreign support for an economy that has collapsed since coming to power in August. Efforts to increase trade between the two nations were also discussed, he said.

China’s Communist Party-owned tabloid Global Times reported earlier this week that representatives of several Chinese companies visited the country in early November to conduct on-site inspections of potential lithium projects and to explore other business opportunities.

China’s two largest lithium miners, Tianqi Lithium Corp. and Ganfeng Lithium Co., said they had no information to disclose about the reported visits.

China has not yet recognized the Taliban, but is building ties with its administration and has promised to help rebuild the country. Beijing is committed to expanding its influence in the region and preventing both militants and refugees from spreading beyond Afghanistan’s borders.

Beijing has existing contracts to exploit Afghan mineral deposits. In the mid-2000s, investors led by the state-owned Metallurgical Corp. won. of China Ltd. a bid worth almost $ 3 billion to extract copper in the Mes Aynak mines near the capital Kabul, although little progress has been made in the intervening period. years.

China and the Taliban are both seeking “friendly relations, and we believe it will open up a favorable environment for Chinese companies” to invest in the country, Alokozay said.

© 2021 Bloomberg LP

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