A 2010 report estimates that Afghanistan is sitting on nearly $1 trillion in mineral wealth
The humanitarian conflict unfolding in Afghanistan after the Taliban grabbed power, has also pushed the mineral-rich nation into a crisis of ownership of resources, estimated to be worth billions of dollars.
In 2010, a report by US military experts and geologists estimated that Afghanistan was sitting on nearly $1 trillion ( £730 billion) in mineral wealth. A huge amount of iron, copper, gold, cobalt and rare-earth deposits are scattered around its provinces. Afghanistan’s lithium reserve is believed to be the largest in the world.
The resources can dramatically reform the economic prospects of Afghanistan, currently one of the world’s poorest countries. However, for years, the potential couldn’t be tapped into due to ongoing conflicts.
With the Taliban controlling the country now, experts worry about what is going to happen to the country’s enormous mineral reserves and how they are going to be used by the militant group.
Illicit drug trade has been a major source of the Taliban’s funding as Afghanistan produces the largest amount of opium poppy in the world. Three-fourth of the total production of these crops came from Afghanistan in 2020.
In a surprising press conference where Taliban spokespersons made claims of bringing the country on track, the group claimed it is going to curb heroin and opium production and bring alternate crops to the country with the help of the international community. However, the claims, like others, may not stand the test of time.
But the demand for materials like lithium and copper is soaring around the world. The International Energy Agency said in May that global supplies of lithium, copper, nickel, cobalt and rare earth elements needed to increase sharply or the world would fail in its attempt to tackle the climate crisis.
Though experts question the ability of the Taliban to explore and use the reserves well, they acknowledge that they could be a potential factor for the militant group to establish trade relations with countries interested in benefitting from it. China has already said it is ready for “friendly relations” with the Taliban after its seizure of power. A Chinese multinational, Metallurgical Corporation of China (MCC), already has a 30-year lease to mine copper in Afghanistan’s Logar province.
But the western world has repeatedly denied getting involved with the insurgent group or legitimising them as the government of Afghanistan. The country so far has heavily relied on international aid and since the Taliban took over, several nations have announced they will be cutting back development aid in an attempt to rein in the Taliban’s strength.
“I wouldn’t and couldn’t invest in Afghanistan with the Taliban running the country. It’s lawless,” Ben Cleary, the chief executive of Tribeca Investment Partners, which runs a global natural resources fund and finances mining projects, was quoted as saying by Reuters news agency.
“China would be the only potential buyer,” he said.
“I think most of the world’s financial system is applying some fairly stringent ESG (environment social and governance) lenses now over investments in that sector,” ANZ Senior Commodity Strategist Daniel Hynes told Reuters in Sydney. “It would be a pretty difficult project to get underway considering all the hurdles.”
Despite the knowledge of the reserves lying under its land, Afghanistan so far hasn’t been able to convert it into a profitable prospect for the country. Security concerns related to any infrastructure or mining project, and issues of corruption have plagued Afghanistan for decades.
Even if the Taliban begins putting its focus into the enormous one trillion dollar reserve of resources, the issues haunting the country could take years to change.