China may align itself with Taliban and try to exploit Afghanistan’s rare earth metals, analyst warns
PUBLISHED TUE, AUG 17 20211:58 AM EDTUPDATED TUE, AUG 17 20217:51 PM ED
Rare earth metals in Afghanistan were estimated to be worth anywhere between $1 trillion and $3 trillion in 2020.
Only hours after the Taliban overran Afghanistan, a Chinese foreign ministry spokeswoman said Beijing was ready for “friendly cooperation with Afghanistan.”
China has dominated the rare earths market globally and threatened to cut off supplies to the U.S. during the trade war in 2019.
China’s alliance with Taliban has to be on international terms: AllianceBernstein
Afghanistan is estimated to have trillions of dollars worth of rare earth metals, and countries — such as China — that may be looking to swoop in on the country must follow international terms, one analyst told CNBC.
Shamaila Khan, director of emerging market debt at AllianceBernstein, said the Taliban insurgents have emerged with resources that are a “very dangerous proposition for the world,” with minerals in Afghanistan that “can be exploited.”
Afghanistan fell into the hands of the Islamist militant group over the weekend, as it seized the capital of Kabul as well as the Presidential Palace. After President Joe Biden’s April decision to withdraw U.S. troops from Afghanistan, the Taliban made stunning battlefield advances — and nearly the whole nation is now under the insurgents’ control.
The international community should put pressure on China, for instance, if it seeks to ally itself with the Taliban, Khan added.
Afghanistan’s rare earth minerals
Minerals and rare earth metals in Afghanistan were estimated to be worth between $1 trillion and $3 trillion in 2020, according to a report in news magazine The Diplomat, citing Ahmad Shah Katawazai, a former diplomat at the Afghan Embassy in Washington D.C. A report by American news organization The Hill earlier this year put the value at about $3 trillion.
So there should be pressure on China if they are going to do alliances with the Taliban in order to generate economic aid for them — that they do it on international terms.
DIRECTOR OF EMERGING MARKET DEBT, ALLIANCEBERNSTEIN
“It should be an international initiative to make sure that if any country is agreeing to exploit its minerals on behalf of the Taliban, to only do it under strict humanitarian conditions where human rights, and rights for women are preserved in the situation,” Khan told CNBC’s “Squawk Box Asia” on Tuesday.
The Taliban’s harsh interpretation of Islam has meant that women’s rights were curtailed, before the U.S. toppled its regime in 2001.
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Afghanistan has rare earth elements such as lanthanum, cerium, neodymium, and veins of aluminium, gold, silver, zinc, mercury, and lithium, according to Katawazai. Rare earths are used in everything from electronics to electric vehicles, and satellites and aircraft.
“So there should be pressure on China if they are going to do alliances with the Taliban in order to generate economic aid for them — that they do it on international terms,” said Khan. She was responding to a question on the commercial motivation behind China’s nod to the Taliban a day after the militants took over the country — given the trillions of dollars worth of rare earths there.
China poised for bigger role in Afghanistan?
Only hours after the Taliban overran Afghanistan, a foreign ministry spokeswoman said Beijing was ready for “friendly cooperation with Afghanistan.”
“On the basis of fully respecting the sovereignty of Afghanistan and the will of all factions in the country, China has maintained contact and communication with the Afghan Taliban and played a constructive role in promoting the political settlement of the Afghan issue,” said spokeswoman Hua Chunying at a press conference on Monday.