Returning to power in Afghanistan after a 20-year gap, the Taliban have regained control of natural resources that a former mines minister of the country once said could be worth up to $3 trillion. That estimate was made toward the end of the last commodities supercycle in 2010 and could be worth even more now, after a global economic recovery from the coronavirus shock sent prices for everything from copper to lithium soaring this year.
The question on everyone’s mind is how will the new Taliban regime exploit the mineral wealth of Afghanistan. Will it seek help from China or will Russia be invited for technology help? There is no clear-cut answer to this conundrum yet, as the situation in the war-ravaged country is quite fluid presently.
Afghanistan is rich in resources like copper, gold, oil, natural gas, uranium, bauxite, coal, iron ore, rare earths, lithium, chromium, lead, zinc, gemstones, talc, sulphur, travertine, gypsum and marble.
A 2019 report by Afghanistan’s Ministry of Mines and Petroleum put the country’s copper resource at almost 30 million tonnes. An Afghan mining sector roadmap published by the ministry in the same year said there were another 28.5 million tonnes of copper in undiscovered porphyry deposits. That would bring the total close to 60 million tonnes, worth hundreds of billions of dollars at current prices as demand for the metal grows.
A consortium of Metallurgical Corp of China (MCC) and Jiangxi Copper took on a 30-year lease for the largest copper project in the country, Mes Aynak, in 2008.
The 2019 report also said Afghanistan had more than 2.2 billion tonnes of steelmaking raw material iron ore, worth over $350 billion at current market prices.
Gold resources were much more modest at an estimated 2,700 kg, worth almost $170 million, while the Afghan ministry also said base metals aluminium, tin, lead and zinc were “located in multiple areas of the country.”
An internal U.S Department of Defense memo in 2010 reportedly described Afghanistan as “the Saudi Arabia of lithium,” meaning it could be as crucial for global supply of the battery metal as the Middle Eastern country is for crude oil. A 2017/18 report from the U.S. Geological Survey notes Afghanistan has deposits of spodumene, a lithium-bearing mineral, but does not provide tonnage estimates, while the 2019 Afghan report makes no mention of lithium at all.
The 2019 mines ministry report does, however, say Afghanistan holds 1.4 million tonnes of rare earth minerals, a group of 17 elements prized for their applications in consumer electronics, as well as in military equipment.
Moreover, with hydrocarbon-rich Iran and Turkmenistan to its west, Afghanistan harbours around 1.6 billion barrels of crude oil, 16 trillion cubic feet of natural gas and another 500 million barrels of natural gas liquids.
That’s according to the 2019 Afghan report, which cited a joint U.S.-Afghan assessment, and implies a value of $107 billion for the crude oil alone at current market prices.
“Most of the undiscovered crude oil is in the Afghan-Tajik Basin and most of the undiscovered natural gas is in the Amu Darya Basin,” the report said. Afghanistan has also historically been a major source of lapis lazuli, a deep blue, semi-precious stone that has been mined in the country’s northern Badakhshan province for thousands of years, as well as other gemstones such as rubies and emeralds.