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China’s interest in Afghanistan’s lithium stockpiles cools due to unsafe conditions

China has warned its private owned companies not to rush to investment in war-torn Afghanistan because the security situation is still volatile in the country. (Photo for Representation)

China has warned its private owned companies not to rush to investment in war-torn Afghanistan because the security situation is still volatile in the country.  According to the Chinese state affiliated newspaper Global Times, several Chinese businessmen are taking  the plunge to develop Afghanistan's huge mineral reserves worth  trillions of dollars.  But citing a fresh advisory from the Chinese government, it says that “the country is still a frontier for great-power competition and that unidentified "foreign forces" are expecting that Chinese enterprises will invest in and build in Afghanistan so that they can "interfere through various channels and ways."

林静莹 李嘉伟:中企赴阿发展要量力而行

The Chinese government warns against repeating the mistakes of the UK, USSR & US, and emphasises the importance of Chinese companies respecting local politics and culture, as well as adhering to the cooperation concept of non-interference in internal affairs, equality, and mutual benefit.

“While winning the goodwill of the Afghan interim government and the Afghan people, they should do a good job in risk assessment and prevention and control. At the same time, follow the guidance of China's official departments and agencies,” says the advisory.

Chinese companies are scouting opportunities in Afghanistan to access the country’s lithium and copper deposits, as Beijing steps into the void left by the US and its allies just months after the Taliban seized power.

China’s efforts to secure mining rights comes as Afghanistan faces acute financial and humanitarian crisis following the exit of US and coalition forces in August. Since then, cash- starved Taliban leaders have been asking Beijing to invest in Afghanistan. Representatives of more than 30 Chinese companies have visited Afghanistan in recent weeks, according to a senior official in Kabul and a representative from a Chinese industry association.

But the talks were at an early stage and did not guarantee that Chinese miners would return to tap Afghanistan’s minerals. 

According to Chinese experts, Afghanistan has a relatively high resource endowment, is highly complementary to China in terms of economic structure, and has great potential for cooperation in investment but the current overall business environment is relatively poor.

“At present, some Chinese private enterprises are gradually gaining a foothold in Afghanistan with courage and are optimistic about the future. The author believes that before investing in Afghanistan, Chinese companies should pay close attention to the situation in Afghanistan, conduct on-site investigations, and prevent risks,” Li Jiawei of Hainan University BRI Institute of China told the Global Times.

The Chinese warnings have come at the time when the Taliban regime was expecting huge investments from them. In fact, the Ministry of Commerce and Industry has issued an advertisement which says, “The Value of Afghan Lithium is equal to Saudi oil. The Ministry calls on major international investors in the mine.” The Taliban leaders were hoping that Chinese will start the work on those mines which were leased by the previous government but so far, the work has not been resumed by the Chinese citing threats from the Islamic State (ISIS-K).

Also Read :  State media acknowledges that China is eying minerals worth one trillion dollars in Afghanistan