China ‘trying hard’ to gain foothold in Afghanistan’s lucrative mining sector: Analysts

China has been intensifying its efforts to enhance Beijing’s political and economic relations with the Taliban, following the collapse of the former Afghan government in August 2021, and has called for the country’s frozen foreign assets to be released.

According to several Taliban ministries and the Central Bank, the Chinese ambassador in Kabul and Chinese investors have held eight meetings with Taliban officials in the first three weeks of June.

Over the past 18 days, China’s envoy in Kabul and a group of Chinese investors have held four meetings with the Taliban’s acting minister of mines and petroleum Shahabuddin Delawar, two meetings with Taliban’s acting energy and water minister Abdul Latif Mansoor, one meeting with Taliban’s acting governor of Afghanistan’s central bank Hidayatullah Badri, and one meeting with Taliban’s head of revenue Sher Mohammad Mushfiq.

The meetings have been focused on issues around Afghanistan’s mines, including lead, zinc, gas, lithium, and talc.

Reports indicate that Chinese companies have already started investing in producing energy using coal in Afghanistan.

“After the withdrawal of foreign forces, particularly the United States, China has tried to improve its political and economic relations with the Taliban, because the Chinese know that there are valuable mines in Afghanistan and they will get more profit with the contract they sign,” said Anwar Khan Andar, a political analyst.

“From an economic point of view, Afghanistan has many mineral resources, which are important and needed for the industrial sector. China is close to Afghanistan and acquiring Afghanistan’s mines will benefit China,” said Fraidoon Azhand, an International Relations analyst.

According to Amu TV findings, four Chinese companies – including HTC Group – have visited Afghanistan in the last three weeks.

“Economically, the Chinese are trying hard to, indeed, take the place of great American power and by approaching large-scale projects such as Aynak copper [mine] and gas in the north, they will take over the key points and strategic points of Afghanistan,” said Sayed Masoud, an economic analyst.

“Afghanistan’s banking sector has several problems, first, in the part of attracting deposits, second, in the part of providing loans that can generate good profit and in the part of transferring money to private entrepreneurs operating abroad. Therefore, China can be a good option to revive and establish inter-bank relations with private and public banks of Afghanistan,” said Siyar Qureshi, the former head of Afghanistan’s banks’ union.

China’s economic interests in Afghanistan extend beyond mining, as they aim to replace the influence of the United States in large-scale projects such as the Aynak copper mine and gas fields in the north. China is also seen as a potential option to revive and establish inter-bank relations with Afghanistan’s banking sector, addressing issues related to attracting deposits, providing loans, and facilitating money transfers.

In late 2022, the Taliban-run Ministry of Industry and Commerce announced that since the Taliban came into power, as many as 150 foreign investors have received investment licenses, and Chinese investors are at the top of this list.

In 2008, MCC China gained the Aynak Logar copper contract, and then China National Oil Company signed the contract for the Amu Darya oil field, but none of them managed to begin the extraction so far.