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Chinese mining groups scour Afghanistan for opportunities

Chinese mining groups are scouting opportunities in Afghanistan to entry the nation’s lithium and copper deposits, as Beijing steps into the void left by the US and its allies simply months after the Taliban seized energy.

A gaggle of mining business representatives has visited Afghanistan in current weeks, in accordance with a senior official in Kabul and a consultant from a Chinese business affiliation.

China’s efforts to safe mining rights comes as Afghanistan faces an acute monetary and humanitarian disaster following the exit of US and coalition forces in August and after Beijing and Taliban leaders held talks earlier than the American withdrawal.

“China has managed to maintain a direct line of communication with the Taliban since August 2021 and being among the first few countries to send aid definitely boosted its relations with the Taliban which are eager for finances to stabilise the Afghan economy,” stated Claudia Chia, an analyst on the National University of Singapore’s Institute of South Asian Studies.

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Leading economies are speeding to safe entry to lithium and copper, essential sources used to develop applied sciences resembling electrical automobile batteries and smartphones. Some studies have stated Afghanistan’s lithium deposits might rival these of the world’s largest identified reserves in Bolivia, in accordance with Nomura.

Chart showing the estimated resources of various commodities in Afghanistan

Talks had been held over current weeks with the Taliban over entry to Mes Aynak, south-east of Kabul, one of many world’s largest copper deposits which Chinese groups beforehand had a licence to mine.

At least one Chinese personal sector group additionally travelled to the jap Nangarhar and Laghman provinces to analysis entry to different minerals, in accordance with folks with data of the journey.

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But the talks had been at an early stage and didn’t assure that Chinese miners would return to faucet Afghanistan’s minerals, the folks stated.

The Chinese business affiliation stated dozens extra corporations have made inquiries over the potential for exploring Afghanistan’s sources, together with lithium.

Nomura analysts stated in a report that as “tier-1 lithium players”, the businesses could be “unlikely” to be concerned in Afghanistan given considerations over environmental, social and governance issues.

Chart showing global identified lithium resources

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Two Chinese miners talked about within the report — Ganfeng Lithium, the world’s largest lithium producer, and Tianqi Lithium, one in every of China’s largest listed lithium miners — each denied any involvement within the newest journey.

Mining initiatives in Afghanistan have lengthy been riddled with immense logistical and safety challenges. Laghman, for instance, is the birthplace and ultimate stronghold of Isis-Okay, an Isis-inspired militant group preventing a low-level insurgency towards the Taliban.

China has been fearful over the method of the Taliban to Xinjiang, the western area which borders Afghanistan and the place Beijing has detrained greater than 1m Uyghurs and different Muslim minorities.

Any mining and manufacturing would hinge on the Taliban guaranteeing safety ensures for Chinese investments, analysts stated.

“The Taliban may consider providing security personnel for Chinese projects, similar to what Pakistan did for CPEC projects,” Chia stated, referring to Beijing-backed infrastructure initiatives underneath the China-Pakistan Economic Corridor.

“Alternatively, Chinese private security companies, who already have a presence in Central Asia and Pakistan, could be hired to provide security . . . That being said, security on the ground would still be hard to manage,” she stated.

China has known as for the lifting of financial sanctions on Afghanistan and for the Taliban to be given entry to billions of {dollars} in frozen overseas alternate reserves held by multilateral monetary establishments, together with the World Bank and the IMF.

Additional reporting by Maiqi Ding in Beijing

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