China Claims Afghan Mineral Resources While US Counts Down to Withdrawal

The US is currently thoroughly occupied in Afghanistan. The ten year war has brought several achievements in the war on terror but has largely failed in expanding Kabul’s control over the country. The war there has offered great stories of courage, brilliance, and sacrifice. American taxpayers have sacrificed, too. The costs of the war is approaching $500 billion, while prospects of fulfilling the mission to bring democracy and security to Afghanistan are in doubt. Now more than ever, Americans are asking the obvious question: what will America receive in return?

It was back in 2010 when the US revealed that vast mineral deposits were discovered in the country, the sum of which topped $1 trillion in value, and the minerals are of the kind that modern industry greatly need. Particularly noteworthy was the discovery of lithium in one of the veins. The US, meanwhile, is more concerned with administration and seeing to it that the Afghan government can adequately invest in mining to fill out the national economy and bring much needed legitimacy to its government. That comes with several major problems, however. Afghan corruption is rampant, the provincial oligarchs commonly make under-the-table deals for rights, and the Taliban will certainly find it a suitable resource for bargaining and leverage against the US and Afghan governments.

China, on the other hand, is under no such restraints. The growing economy is resource hungry and is using the US’s preoccupation with other issues to make headway into the new discoveries. When the story of the mineral finds broke, the New York Times noted the concern US officials had over China’s ambition to dominate development.

Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine.

…At the same time, American officials fear resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth, which could upset the United States, given its heavy investment in the region. After winning the bid for its Aynak copper mine in Logar Province, China clearly wants more, American officials said.

That was in 2010. This week, China announced a “historic day,” boasting it was the first foreign country to make an international oil deal with Afghanistan in decades.

China National Petroleum Corporation (CNPC) will manage the exploration with its Afghan joint venture partner Watan Group in the northern provinces of Sar-e Pul and Faryab by drilling in three oil fields: Kashkari, Bazarkhami and Zamarudsay.

Afghanistan’s oil reserves are estimated to total 1.6 billion barrels. Afghanistan has been entirely reliant on fuel imports from neighboring Iran and Central Asian Nations, and is now more than open to foreign investors helping develop oil-extraction and refining capabilities.

The oil fields in the Amu Darya Basin alone are estimated to harbor around 87 million barrels of oil, which can generate government revenues up to 5 billion dollars within 10 years. The oil deal is set for a 25 year term.

But experts report that the CNPC will have to spend considerable time, probably five to ten years, before they can actually find the oil and begin extracting it for market.

The demand for energy in China is booming, with its energy consumption per GDP more than double the world’s average, thus making China more assertive to take risks. Mining projects in Afghanistan will likely be targeted by insurgents, but local government officials promise the army will set up special units to guard the project.

China already signed a major deal with Afghanistan in 2008 when Metallurgical Corp of China started the development of huge Aynak copper mine south of Kabul, which will start production in 2014.

Western countries have held back from investing in Afghanistan, which has been in war over the past ten years. China has taken the forefront in the exploration of what some say could amount to 3 trillion dollars’ worth of natural resources, including untapped copper, iron and oil deposits.

Using the US presence as blanket for security, China is busing laying the early foundations for investments and important political ties in Afghanistan, which leaves one question to ask: what will China’s role in Afghanistan be once the US completes its withdrawal in 2014? That answer can be answered from simply observing China’s decade-long march to regional dominance. China has been a keen spectator in the US’s military situation, its economic problems, the political toll they have taken domestically, and the fracturing relationships between the countries it has most invested in: Iraq, Pakistan and Afghanistan.

While the US is bogged down in its police missions, China is playing “let’s make a deal.”

When US troops leave, China will have only two options – to leave Afghanistan or to find a way to defend their huge Afghan investments, such as the Aynak copper project, from Taliban insurgents.

In the Aynak deal, China must remain for 30 years for mining operations. It has also pledged to build rail and road connections to transport minerals to China.

Last year, the Afghan authorities and the State-owned Metallurgical Corp of China (MCC) signed a $7 billion (Dh25.7 bn) deal to build a rail line from the border with Pakistan up through Kabul and the Aynak copper deposit south of Kabul and then up to the Uzbek border.

What will be the fate of this project after the withdrawal of US troops? Under what conditions is it logical for China to make more huge investments in Afghanistan?

It is hard to believe that resource-hungry China will just walk away from these projects. And to defend its projects, China is unlikely to rely solely on Afghan forces, which are still not fully reliable.

It is highly likely, then, that China will come to replace the US in fighting the Taliban in Afghanistan. Pakistan would continue to play a front line role against Islamist extremists as China’s strategic ally, while the Shanghai Cooperation Organization (SCO) could assume the role now played by Nato. In all this Pakistan will be China’s vital strategic partner.

As an alternative to the US, Beijing can extend much-needed financial assistance to Pakistan.

Pakistan has been the major supply route for US and Nato missions to Afghanistan. China, which shares a small, mountainous border with Afghanistan, may open a major route for overland transit of military supplies.

The route could follow existing railway routes within China before crossing into Kazakhstan, where it could be linked up with supply lines that traverse Uzbekistan and Tajikistan. All this would permit development of adequate transit links into Afghanistan. Along with ocean links to Pakistan, this could provide China with sustainable ways to get military supplies into Afghanistan.

On November 26, a Nato attack on a Pakistani border post killed 26 Pakistani soldiers. In retaliation, Islamabad has threatened to halt its efforts to persuade the Afghan Taliban to negotiate.

But that incident merely demonstrated an emerging geopolitical reality: a strategic consensus between China and Pakistan threatens to scuttle US prospects of ending the war in Afghanistan.

Islamabad is prepared for strategic cooperation with China, in a bid to cut the US out of Afghanistan. And China, ready and willing to exploit Pakistan’s volatile relationship with the US, has the resources for both economic and military investment.