What’s next for Afghanistan’s vast rare earth supply after the US pulls out? – Steel, aluminum, copper, stainless steel, rare earths, metal prices, forecasts
As the world watches with growing concern the political game unfolding in Afghanistan with the Taliban takeover, another parallel element to this developing story that is slowly creeping into public consciousness is the vast treasure trove of minerals within. this country, and how the Taliban government will exploit it.
A US Geological Survey (USGS) estimate given years ago put the value of Afghanistan’s untapped mineral resources at $ 1,000 billion. Some Afghan officials have said the actual figure could be three times as high.
The Afghan mountains contain a wide range of essential resources including: copper, gold, petroleum, natural gas, uranium, bauxite, coal, iron ore, rare earths, lithium, chromium, lead, zinc, gemstones, talc, sulfur, travertine, gypsum and marble.
However, even before the United States entered its borders 20 years ago, Afghanistan had struggled to exploit these reserves.
Two decades later, the situation is not much different.
While in the country, the United States did not engage in mining for these metals and minerals due to the high risks.
Now, with the Taliban in the driver’s seat, it remains to be seen how they will use these resources to their advantage. What makes these resources particularly attractive to countries like China and Russia is the fact that some of the minerals could fuel the transition to renewables in the future.
You want more MetalMiner on your terms. Sign up for weekly updates by email here.
Afghan rare earths
For example, lithium is a crucial element in making batteries for electric cars, solar panels and wind farms. International Energy Agency forecasts global lithium demand will increase more than 40 times by 2040.
In a 2010 memo, the US Department of Defense describes Afghanistan as “Saudi Arabia of lithium,” Reuters reported. As such, the country could be as important to the global supply of battery metal as the Middle East country is to crude oil.
At the time of comparison, lithium batteries were already widely used for electronic devices. However, it was not yet clear how much lithium would be needed for electric vehicle (EV) batteries and the transition to lower carbon emissions across all industries.
A 2017/18 USGS noted report that Afghanistan had deposits of spodumene, a mineral containing lithium, but did not provide estimates of its tonnage. The 2019 Afghanistan report made no mention of lithium.
But records show that Afghanistan does, however, hold 1.4 million tonnes of rare earth minerals, a class of 17 elements widely used in consumer electronics and military equipment.
Copper is another commodity that is found in Afghanistan. Despite the recent price drop, with prices reaching over $ 10,000 per metric tonne earlier this year, this is another attractive proposition for new leaders.
Chinese companies signed contracts to mine one of the world’s largest untapped copper deposits in Afghanistan about 10 years ago, in a sparsely populated area of ââLogar province, about 40 kilometers southeast of the Afghan capital, Kabul.
In 2007, China Metallurgical Group Corporation had leased the giant Mes Aynak copper ore deposit for 30 years, mining 11.5 million tonnes of copper. My Aynak, which means “small copper deposit” in Dari, is a large deposit with an estimated value of $ 50 billion (317 billion yuan) based on previous estimates. However, little has resulted from these efforts.
Taliban and China
While the Taliban takeover may deter foreign investors, China and Russia may be willing to do business with them.
Following the entry of the Taliban into Kabul, China has declared itself ready to maintain friendly and cooperative relations with Afghanistan.
As part of its efforts to dominate clean energy manufacturing, China has emerged as a major buyer of minerals. It is also at the forefront of the world in separating and refining them to make them useful for batteries and other technologies. China has also invested in overseas mining projects, including cobalt mines in the Democratic Republic of Congo.
Francis Fannon, who served as Assistant Secretary of State for Energy Resources during the Trump administration, warned that maybe it was only a matter of time before the Taliban began to cooperate with China, which already dominates the supply chain of vital minerals.
Jane Nakano, senior member of the Energy Security and Climate Change program at the Center for Strategic and International Studies, was quoted as saying that Afghanistan possessed a wealth of mineral resources that was more likely to be exploited under Sino-Taliban cooperation than under Western engagement in the past.
More MetalMiner is available on LinkedIn.