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Chinese mining pools scour Afghanistan for opportunities

Chinese mining groups are looking for opportunities in Afghanistan to access the country’s copper and lithium mines, as Beijing steps into a vacuum left by the US and its allies just months after the Taliban took power. .

According to a senior official in Kabul and a representative of a Chinese industry association, a group of mining industry representatives have visited Afghanistan in recent weeks.

China’s efforts to secure mining rights come as Afghanistan faces an urgent situation financial and humanitarian crisis after the withdrawal of US and coalition forces in August and after the leaders of Beijing and the Taliban held talks before the US withdrawal.

“China has been trying to maintain a direct line of communication with the Taliban since August 2021 and being one of the first few countries to send aid has certainly boosted their relations,” said Claudia Chia. with the Taliban. an analyst at the National University of Singapore’s Institute of South Asian Studies.

Leading economies are rushing to secure access to lithium and copper, important resources used to develop technologies such as electric vehicle batteries and smartphones. According to Nomura, some reports suggest that Afghanistan’s lithium deposits are comparable to those with the world’s largest known reserves in Bolivia.

Graph showing estimated resources of various commodities in Afghanistan

Negotiations have been held in recent weeks with the Taliban approaching Mes Aynak, southeast of Kabul, one of the world’s largest copper mines formerly occupied by Chinese groups. has a license to mine.

At least one Chinese private sector group has also traveled to the eastern Nangarhar and Laghman provinces to study possible access to other minerals, according to people with knowledge of the trip.

But the new negotiations are at an early stage and there is no guarantee that Chinese miners will return to mining Minerals of Afghanistan, the people said.

The China Industry Association said dozens of other companies had questioned the potential to tap Afghanistan’s resources, including lithium.

Nomura analysts said in a report that as “tier 1 lithium players” companies would be “unlikely” to enter Afghanistan due to concerns about environmental issues, society and governance.

Graph showing globally identified lithium sources

The two Chinese miners mentioned in the report – Ganfeng Lithium, the world’s largest lithium producer, and Tianqi Lithium, one of China’s largest listed lithium miners – both denied any any participation in the latest trip.

Mining projects in Afghanistan have long faced major security and logistical challenges. For example, Laghman was the birthplace and last stronghold of Isis-K, a group of Isis-inspired fighters fighting against low-level insurgents against the Taliban.

China has been worried about the Taliban’s approach to Xinjiang, the western region bordering Afghanistan and where Beijing has detained more than 1 million Uighurs and other Muslim minorities.

Any mining and production activities will depend on the Taliban ensuring the security of Chinese investments, analysts say.

“Taliban may consider providing security personnel for Chinese projects, similar to what Pakistan has done for CPEC projects,” Chia said, referring to infrastructure projects run by the North. Business Backing in the China-Pakistan Economic Corridor.

“Also, private Chinese security companies, who already have a presence in Central Asia and Pakistan, can be hired to provide security. . . That said, security on the ground will still be difficult to manage,” she said.

China has call for the lifting of economic sanctions on Afghanistan and to give the Taliban access to billions of dollars in frozen foreign exchange reserves held by multilateral financial institutions, including the World Bank and the IMF.

Additional reporting by Maiqi Ding in Beijing

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