Analysts explain why China looks to Afghanistan’s mines

A mine worker in Baghlan, northern Afghanistan.

Analysts say China has often sought engagement in mining projects in Afghanistan over the past two decades but these efforts have been heavily affected by political and security issues.

But under the Taliban rule in Afghanistan, analysts said, China is showing slightly more interest in investing in the mining sector. However, such projects will not benefit the country unless there is transparency and strong guarantees for these agreements.

“China has been involved in Afghanistan’s mining sector over the past two decades, seeking a role in the Mis Aynak copper mine besides an interest in natural gas extraction in northern Afghanistan, but it did not succeed,” said Sayed Massoud, a former lecturer at Kabul University.

He argues that China sees its interests in Afghanistan from Pakistan’s perspective. “It means in an agreement between Pakistan and China, Afghanistan has been introduced as an essential region (for both). China is okay with that, but India is against this view,” he said.

What is required?

Mining contracts require transparency in all processes and strong guarantees from Chinese companies.

“The efficiency of Chinese companies’ investment in Afghanistan’s mines depends on the type of nature of contracts,” said Abdul Rahim Faizan, a member of the chamber of mines and industries.

He mentioned that many mineral resources are extracted illegally, damaging the future of the country’s economy.

National investors believe that domestic companies need to be given a part in such agreements.

“If the contracts are awarded to foreign companies, they will invest and extract mineral resources and will take them out of the country, but if national companies are given a role in mining projects, they will benefit the people and will create jobs for them,” said Haroon Azim, an Afghan investor.

No contract with China yet

Recently, eight major mining projects were put on bidding for which 250 national and international companies have sent their proposals, according to figures by the Ministry of Mines and Petroleum.

“Corruption in the previous government had reduced the interest of foreign companies to invest in Afghanistan,” said Burhan, Taliban spokesman for the ministry, adding that many companies including Chinese firms are interested to invest in the mining sector in Afghanistan.

“We welcome their interest,” Burhan said. “We haven’t had any official contract with Chinese companies so far, but talks are underway in this regard.”

Figures by the mines and petroleum ministry indicate that 158 small mineral resources have been identified in the country, some of which are under extraction.

The statistics also show that 16 mining projects have been contracted with various companies, providing hundreds of jobs in the country.

The Taliban spokesman said the group is protecting the lithium resources in the country while “we have received requests from many countries to invest in these mines, but we have not made a decision on this so far.”

Afghanistan is rich in mineral resources but a recent UN report shows nearly 90 percent of the population in the country is at risk of sinking below the poverty line. The fall of the previous government followed by the withdrawal of US and international troops from Afghanistan added many layers of complexity to the challenging situation in the South Asian nation.