Taliban keeps China on tenterhooks over lithium mining contracts in Afghanistan

The frenzied exit of US troops in 2021 brought the Chinese rushing in to fill the vaccum in Afghanistan. The Chinese government and businessmen were keen to extract lithium, which has taken a place of pride among minerals for its rising use in electric vehicles.

Since then China has made progress with the Taliban government in signing business deals, at least in concluding a pact to extract oil from the Amu Darya basin in northern Afghanistan. Beijing and its businessmen have also offered big deals to the Taliban to extract lithium but the Taliban is sitting on those offers at the moment, says Kabul Now.

After taking over the reins of the country, one of the important decisions by the Taliban was to stop the mining and the export of lithium. In recent months it even arrested a Chinese national for smuggling lithium ore to China through Pakistan.

During its 20-year stay in Afghanistan, the US government had said that the country is estimated to hold at least $1 trillion worth of lithium which could help pull out the country from its economic mess. For the Taliban, which is still trying to establish an effective government in the country in the face of global opposition and frozen bank accounts, China seems to give hope.

The communist country is heavily invested in the conflict-torn nation in partnership with all-weather ally Pakistan.

Recently, The Washington Post reported that Afghanistan – called ‘the Saudi Arabia of lithium’ by the US, is being courted by Chinese nationals who have been treking the mountain ranges of the country looking for lithium, even in areas known to be dangerous for foreigners. The interest for Afghan lithium among the Chinese has evoked imagery of the 19th century gold rush.

Kabul Now reports that Chinese company Gochin expressed its willingness to invest $10 billion in Afghanistan’s lithium deposits in April this year. Such an investment could create 120,000 direct and a million indirect jobs in a country where poverty continues to grow in the face of unemployment and rising humanitarian crisis.

However, in May the Taliban government said that it was not in a rush to give away lithium contracts to China. Arab News quoted Hamayoon Afghan, spokesman for the Ministry of Mines and Petroleum, as saying: "We are not in a hurry for the lithium contract, we will not take hurried steps and action in this regard. We are not obliged to give this contract only to China."

China has been courting the Taliban with various offers. These include extending the China Pakistan Economic Corridor (CPEC) to Afghanistan, which recently completed 10 years in neighbouring Pakistan. In a trilateral summit in Pakistan's capital Islamabad, the three nations had resolved to extend trade and investment besides curbing terror groups.

News agency ANI reported in mid-July that officials of Fan China Afghan Mining Processing and Trading Co. announced an investment of $350 million in sectors ranging from construction to health to energy in Afghanistan. The presence of Chinese businessmen is so conspicuous in Kabul that Chinatown has cropped up in the Afghan capital. The overwhelming presence of Chinese nationals led to an attack on a hotel frequented by the Chinese.

Even as the Taliban ponders over the presentations made to them, and studies the offers by Chinese companies, the rulers in Kabul are acutely aware of the presence of terror groups, both hostile and friendly, who could stand in the way of extracting lithium. China’s grand plans to mine lithium have been thwarted once earlier during the time of Hamid Karzai when the two governments had signed an agreement for mining in 2008. It could not be implemented for various reasons including the presence of terror groups.

With the US gone and the Taliban trying to reduce violence by curbing the activities of hostile groups, Beijing is once again making a determined effort at extracting Afghanistan’s rare earth reserves. Lithium is equated with gold and oil for its use in batteries as well as electric gadgets. With the world in a rush to switch over from fossil fuels and avoid the wrath of a changing climate, there is a mad rush to mine the rare mineral. China is a frontrunner in the Afghan lithium sweepstakes even as the West continues to figure out how to deal with the Taliban.