By Saleem H. Ali and Thomas Hale
(FPRI) — There is a growing consensus that the “green transition” or “clean energy transition” to low-carbon technologies will require a range of minerals (“green minerals”). As the lightest metal on the periodic table, lithium has certain unique properties which make it very suitable as a metal for batteries needed for the green transition. A Chinese company has recently expressed interest in investing $10 billion in Afghanistan’s lithium resources in the south, according to the Taliban-run Ministry of Mines and Petroleum. Another Chinese firm has been awarded with an oil and gas exploration license in the north.
The Taliban claims the lithium deal would generate up to 120,000 direct and many more indirect jobs in the country as it faces a severe humanitarian crisis and continuing international sanctions. As part of the deal, the Chinese firm has also promised to invest in new infrastructure projects in Afghanistan.
China is already involved in a fourteen-year deal to extract copper from the Mes Aynak copper mine in Logar province, one of the world’s largest copper reserves. The Chinese state-owned Metallurgical Group signed the deal with the Afghan government in 2007. This project is yet to begin because of years of security issues, logistical challenges, and contract renegotiations.
There has also been a tentative agreement reached between China and Pakistan to extend the China-Pakistan Economic Corridor development corridor to Afghanistan. On July 7 of this year, the China Afghan Mining Processing and Trading Company announced an investment of $350 million over the next few months in various sectors including power generation, construction of a cement factory, and public health.
Afghanistan has long been known for its wealth of mineral resources. The Ministry of Mines and Petroleum in Afghanistan estimates it may hold 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth elements such as lanthanum, cerium and neodymium, and lodes of aluminum, gold, silver, zinc, mercury, and lithium.
The proposed lithium deal would allow the Taliban to benefit from one of the few large investment opportunities in Afghanistan and generate desperately needed revenue to boost the country’s economic viability.
It would also give the Taliban some international legitimacy in the global mining sector and a future source of critical minerals.
Taliban’s Desperation for Recognition
After taking power in August 2021, the Taliban have gone to drastic measures to eliminate women and girls from public life. The group has closed schools for girls above grade six, banned women from universities, and restricted women and girls from working outside their immediate family environs.
The Taliban has not been officially recognized by any other government in the world, but various countries have established initial diplomatic contacts. The country’s banking system has also been cut off from the rest of the world since the Taliban took power, causing economic hardship for all Afghans.
The Taliban saw an opportunity for formal recognition at an international conference on Afghanistan organized by the United Nations in Qatar in early May. However, UN Secretary-General Antonio Guterres cited women’s rights as the main stumbling block in recognition.
The new Chinese investment deals could now be used as a bargaining chip to push for women’s and girls’ rights in Afghanistan. China has already successfully done something similar by requesting the historic Buddha statues around the Mes Aynak copper reserves be preserved as a condition of its mining contract.
Washington should support—or at the very least not oppose or obstruct—China’s investments in Afghanistan. Concerns about Chinese investment buoying the Taliban regime are valid, and its Afghanistan deals deserve scrutiny, but putting communities that desperately need investment on the chopping block imperils human security. Finding a path for exemption of US sanctions for such investment should be duly considered.
The United States has a stated policy of willingness to cooperate with China on climate mitigation technologies. These investments in Afghan lithium would resource critical metals for such climate mitigation with a development nexus for one of the world’s most impoverished countries. It would give the United States measured goodwill, without diplomatic recognition of the Taliban, in ways similar to what has been done with sanction waivers for Turkey with oil and gas imports from Iran.
For a global green energy transition, the United States and its allies must recognize that now is the time to consider mineral supply based on economic geology rather than merely geopolitics. The location of mineral deposits is based on geology, not the politics of the time. Lithium deposits in Afghanistan are just one part of this equation.
To be sure, the United States and its allies will not be resourcing lithium or other critical materials from Afghanistan anytime soon. While green technology materials can have a more diverse sourcing base, Western defense agencies can adhere to the concept of “friend-shoring” (perhaps from the G7 and affiliated alliance countries) to maintain security. This is best accomplished through a domestic realignment of government agencies, including the suggested establishment of a Critical Minerals Bureau. At the same time, such activities should not preclude mineral sourcing from locations with high-grade reserves that can be extracted with less environmental impact and more social benefits for human development. There have been specific proposals to develop a global international agreement on mineral supply security through organizations such as the International Renewable Energy Agency as well.
Can the Taliban Be Lured into Reforms?
The Taliban have a unique opportunity to secure investment and transition from a terrorist group to an internationally recognized government. This would require some clear and strong messages from powerful Muslim countries like Qatar and Saudi Arabia for the Taliban to disavow their draconian interpretation of Islam, particularly on women’s rights.
The United States and the West have a record of engagement in broad trade regimes with countries that have repugnant laws across the world. Furthermore, economic expediency can be a motivator for change as we saw from Saudi Arabia’s recent reversal of misogynistic regulations in attempts to diversify its economy.
There can be a measured mechanism of engagement with a quid pro quo incremental building of ties. It may be worth noting that in their earlier rule, the Taliban were willing to send a delegation to Houston in 1998 to negotiate an oil deal with UNOCAL. More recently, the Taliban have engaged in the construction business in Qatar for the World Cup despite their apparent repugnance for sports.
While there is still armed resistance in some pockets of Afghanistan from Islamic State forces, the mineral deposits (with the exception of gemstones) are all securely in Taliban-controlled parts of the country.
Ultimately, the green transition is a planetary challenge and all countries, regardless of their political persuasions or cultural values, need to find the most ecologically and economically efficient path for harnessing its material needs. There is even potential to bring forth an Islamic ethical imperative into the conversation on this matter with the Taliban.
The Private Sector as Interlocutor
As the news of China’s lithium interest made its way around the world, local reporters at Michigan News Source found that the company interested in the lithium investment is actually a firm called Gotion Inc. It is the same company that has received scrutiny from Michigan lawmakers for their proposed $2.36 billion electric vehicle battery factory near Big Rapids, Michigan, with construction set to begin by July 2023.
The Michigan Senate Committee recently approved $175 million in state grant incentives to support the factory. This could end up sourcing its raw materials from Afghanistan.
Advocates for the battery facility claim this is a “once-in-a-century opportunity” for large-scale investment. It is estimated to generate 2,350 jobs. This is not the first case of companies connected to China being investigated or rejected by domestic politics. Virginia Governor Glenn Youngkin blocked a deal with Ford Motor Company and Contemporary Amperex Technology Limited to bring car battery research and manufacturing to Southside Virginia due to “China concerns.”
The economic imperatives for trade and the comparative advantage of various locations for mineral supply will continue to motivate markets. China could be an effective interlocutor in this regard as clearly the American private sector seems to suggest. Intransigence on matters of economic efficiency as well as ecological efficiency will undermine the speed and substance of the Green Transition.
China and the West have agreed to collaborate on climate change mitigation strategies despite their other differences. We have also argued in greater technical detail the geological features that make Afghanistan’s minerals particularly attractive for the green transition. Here is an opportunity to find a path forward while also helping to secure the future for a country that the West has a particular responsibility to develop.
The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
About the authors:
- Dr. Saleem H. Ali is the Blue and Gold Distinguished Professor of Energy and the Environment at the University of Delaware, chair of the Department of Geography and Spatial Sciences, and the author of Earthly Order: How Natural Laws Define Human Life (Oxford University Press, 2022).
- Thomas Hale is a professor in public policy at the Blavatnik School of Government, University of Oxford. His books include Beyond Gridlock (Polity 2017), Between Interests and Law: The Politics of Transnational Commercial Disputes (Cambridge 2015), Transnational Climate Change Governance (Cambridge 2014), and Gridlock: Why Global Cooperation Is Failing when We Need It Most (Polity 2013).
Source: This article was published by FPRI