Report Wire - China inches nearer to Afghanistan’s uncommon Earth reserves with new oil deal

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China inches nearer to Afghanistan’s uncommon Earth reserves with new oil deal

8 min read
Devvrat Pandey

By Devvrat Pandey: Chinese Xinjiang Central Asia Petroleum and Gas Co (CAPEIC) signed a take care of Taliban-led Afghanistan within the capital metropolis of Kabul. The performing Minister of Mines and Petroleum for the Taliban, Sheikh Shahabuddin Dilawar, on January 5 introduced the deal during which the Chinese firm would extract oil from the Amu Darya basin situated within the northern a part of Afghanistan.

Zabihullah Mujahid, the spokesperson for the Taliban-run administration, stated in his tweet ,“The company (CPEIC) will invest $150 million in one year and $540 million in the next three years. In this contract, the [Taliban administration] will be a 20% partner, and this share will increase to 75%.”

He additional added that this undertaking will give employment to round 3000 Afghan folks, which is able to increase the financial system and growth of the nation.

According to estimates, other than oil, Afghanistan is estimated to have 1-3 trillion {dollars}’ value of uncommon earth and different minerals. A former diplomat on the Afghan Embassy in Washington, DC Ahmed Shah Katwazai, identified that Afghanistan has uncommon earth minerals corresponding to lanthanum, cerium, and neodymium, together with veins of aluminium, gold, silver, zinc, mercury, and lithium. China may very well be trying to lengthen an unhindered alternative of exploiting these components within the absence of main competitors within the nation.

What are uncommon Earth components?

Rare earth components (REE) are usually dispersed, which suggests they’re solely typically present in concentrated satisfactory clumps to make them viable to mine. It was the shortage of those minerals that led to them being referred to as uncommon earth.

According to the United States Geological Survey, China dominates the worldwide marketplace for uncommon earth. It is estimated that China holds probably the most good portion of the world’s uncommon earth reserves. It is the most important producer and provider of uncommon earth minerals which are being utilized in varied high-tech industries corresponding to electronics, defence, and renewable power. However, China has been going through rising competitors within the international marketplace for these minerals, and the nation is probably going exploring varied choices for securing a dependable provide of uncommon earth.

According to Sean P. Dudley, US Forensics Engineer, “In one cell phone there is one gram of rare earth elements. At best recovery, you have to mine 52 gm of rare earth ore for one cell phone. Multiply that with about 6.8 billion people in the world, that requires 3,90,000 tons of ores. That’s just our cell phones, imagine thinking about our infrastructure grid, our laptops.”

The consumption of REE is vast; from semiconductor chips to the automobile industry and from aircraft to satellites, these rich minerals play a vital role in critical development. We cannot ignore the amount of hard work that is done to extract rich refined minerals from its raw ores. Now, we can imagine the fall in the depletion of current deposits of ores.

China is making an insistent effort to integrate and upgrade its rare earth supply chain of upstream mining, processing, manufacturing, and deeper applications.

Xianbin Yao, who is the professorial lecturer of International Studies at De LaSalle University Manila, Philippines, believes that China had only about one-third of the world’s rare earth reserves. China now accounts for 60% of global rare earth mined production, 85% of rare earth processing capacity, and over 90% of high-strength rare earth permanent magnets manufactured. Rare earth alloys and magnets that China controls are critical segments in missiles, firearms, radars and stealth aircraft.

Is China ready for a bigger role in Afghanistan?

Exploring the most unstable land where significant terror groups exist will not be as simple as China perceives. No doubt Afghanistan possesses a wealth of nonfuel minerals, but Al-Qaeda and ISIS-led militants will be the most challenging front for Chinese personnel. Also, poor infrastructure, unskilled labour and a hostile environment could pose a severe headache for the Chinese.

Beijing’s natural greed towards Afghanistan has been visible since the early days of the announcement of the US withdrawal from the country. Along with Russia, the Chinese were among the more outspoken and concerned about the consequences of a US withdrawal. US President Joe Biden had announced in mid-April 2021 that the US would “begin its final withdrawal” on May 1. Biden declared that “it’s time to terminate the forever war, hence our troops, as well as our NATO allies and operational partners, will leave Afghanistan before the 20th anniversary of the 9/11 attacks.”

China formally didn’t ever recognise the Taliban because the nation’s lawful authorities in Afghanistan, however its greediness over REE to seize the chance of being wealthy in uncommon earth minerals with profitable funding schemes led it to spend money on Afghanistan. On August 16, 2021, Chinese Foreign Ministry Spokesperson Hua Chunying at a press convention , inside hours of the Taliban’s seize of Kabul, had stated that Beijing was prepared for “friendly cooperation with Afghanistan” and to “play a constructive role in Afghanistan’s peace and reconstruction.”

Even earlier than the Taliban’s full energy seize over the Afghan capital, China’s Foreign Minister Wang Yi met with a Taliban delegation led by the top of the Afghan Taliban political committee Mullah Abdul Ghani Baradar in Tianjin on July 28, 2021.

Wang Yi Meets with Head of the Afghan Taliban Political Commission Mullah Abdul Ghani Baradar. (Source: MFA, China)

During the go to, Wang Yi stated that China, as Afghanistan’s largest neighbour, had at all times revered the sovereignty, independence and territorial integrity of Afghanistan and by no means interfered in Afghanistan’s inner affairs. He additionally argued that Afghanistan’s land belonged to the Afghan folks, and its future ought to be within the arms of its folks.

The Chinese state media paper, Global Times, in one in every of its articles argued that China was “best positioned to help Afghanistan reconstruction”. China is broadly identified for its debt ways throughout Africa, South America and Asia. Earlier, it entered Africa with debt-trap funding methods within the identify of growth plans together with high-class infrastructure, trade, roads and many others.

Is China the one key participant to acknowledge the REE presence in Afghanistan?

China just isn’t a brand new participant in REE market because it holds a powerful place as a provider of uncooked and wealthy uncommon earth minerals. It began the journey again in 1970, and went additional downstream, including worth and creating jobs. Chinese massive concentrate on uncommon earth components was pushed by the good alternative to offer excessive value-added jobs and uncommon earth turned out to be a strong base of the high-technology manufacturing trade.

World map exhibiting reserves of uncommon earth components 2022. (Source: USGS 2022 report)

The withdrawal of the United States from Afghanistan was seen by China as a chance to discover Afghan soil and lengthen its monopoly on the REE market. Previously, China had contracts with Saudi Arabia and different African nations underneath Public Private Partnerships (PPPs). To meet its REE wants, China was pressured to search for new resource-rich land.

Chinese state-owned firm China National Petroleum Corp (CNPC) had already entered Afghanistan in 2012 to extract oil from the Amu Darya basin in Faryab and Sar-e Pul within the northern provinces. Another deal first signed underneath Ashraf Ghani’s authorities was for the operation of a copper mine in japanese Logar province by an organization in talks with the Taliban-led administration. Its BRI undertaking scheme en path to japanese European nations crosses Afghanistan’s Wakhjir Pass on the western finish of the Wakhan Corridor.

Trump’s Shadow Advisor’s Role in Afghanistan
Eric’s Plan of Action and Connection with Afghan officers. (Analysis by Devvrat Pandey)

Over the final twenty years, the battle in Afghanistan had resulted within the deaths of two,461 US personnel, in addition to 20,722 wounded, and the deaths of practically 4,000 US contractors. The US-Taliban battle price the United States Department of Defense greater than two trillion {dollars}.

A US-based nonpartisan, nonprofit watchdog American Oversight alleged {that a} US businessman named Erik Prince who was touted as a ‘shadow advisor to Donald Trump’ enormously influenced the previous US president throughout his administration. According to their letter to the Office of the Director of National Intelligence, Erik’s secret mission was to extract wealthy uncommon earth minerals from Afghanistan soil.

American Oversight accused the founding father of US-based non-public safety agency Blackwater and logistic firm Frontier Services Group of pitching a plan to the Trump administration to rent him to denationalise the battle in Afghanistan utilizing safety contractors. Erik Prince created a plan and defined his targets and methods associated to privatizing the battle. The advisor’s method was to “curtail endless expenditure of US blood and treasure,” and use Afghanistan for a “strategic mineral resource extraction funded effort that breaks the negative security economic cycle.”

Some experiences additionally alleged that Erik Prince had executed thorough floor analysis and deliberate a technique to enter the US-Afghan battle and anticipated the mining of a few of the war-torn provinces in Afghanistan to assist navy operations and acquire strategic mineral assets for the US.

According to Aram Roston (investigative reporter for BuzzFeed News, Washington DC), Erik had shared his plan with then President Trump and his workplace at a gathering in Camp David in late August 2017. In his presentation he defined all of the ways and methods to denationalise Afghan battle and exit route.

Prince’s presentation to the Trump Administration on privatizing Afghanistan’s battle, supply: BuzzFeed

The query of whether or not America extracted uncommon earth minerals has remained a thriller till now. Many information businesses and suppose tanks stored monitoring Erik’s operation on Afghan uncommon earth minerals extraction and located little definitive proof however have been unable to conclude because the illicit mining curiosity had benefited many gamers.

A report printed within the Washington Post alleged that the Hong Kong-based Frontier Services Group, which was funded by Erik Prince, had overseen the Chinese safety coaching faculty during which trainers with police and navy expertise train courses on tackling detainees, dealing with hostage conditions, and thwarting terrorist assaults. Beijing’s International Security Defense College, which boasts of turning into “the largest private security training school in China,” was educated by FSG.

Experts have voiced issues over elevated Chinese curiosity in Afghanistan’s pure assets. Shamaila Khan, head of rising market debt methods on the US-based asset administration agency AllianceBernstein, in an interview quickly after China established diplomatic relations with the Taliban regime in Afghanistan, identified that the world neighborhood ought to maintain China and the Taliban accountable earlier than they’re allowed to mine the uncommon earth riches of the nation.

“It should be an international initiative to make sure if any country is agreeing to exploit its minerals on behalf of the Taliban, they only do it under strict humanitarian conditions where human rights and rights for women are preserved. So there should be pressure on China if they are going to make alliances with the Taliban to generate an economic gain for them, that they do it on international terms,” Khan stated.

Published On:

Jan 23, 2023