China will be looking to boost its investments in Afghanistan's mining sector, as the Taliban take over the reins of the country following the withdrawal of the US troops this week, the former US ambassador to Kabul has said.
“The Chinese are comfortable thinking longer term … to have significant investment in the mining sector and the hydrocarbon sector assuming that the Taliban remain in power for considerable future,” Hugo Llorens said during a webinar organised by the Saxo Bank on Wednesday.
“It’s a potential victory for China … the fact that Afghanistan has major resources of rare earth, an area where China dominates.”
Mr Llorens did not elaborate further on the potential investments from China but said that Afghanistan is sitting on a trillion-dollar of "easily recoverable" resources including copper, iron ore and rare earth metals.
“We were in advanced discussions with the Afghan government to give American and European mining companies some potential concessions. The problem is always security,” Mr Llorens said.
Chinese companies are already involved in the mining sector in Afghanistan. In 2007, the Metallurgical Corporation of China acquired a 30-year lease to mine copper at Afghanistan's Mes Aynak for $3 billion, the largest foreign investment in the country's history. MCC's mining operations, however, have been plagued by political instability and the conflict between the Taliban and the former Afghan government.
"If the Taliban can provide China stable operating conditions, then the copper operations alone potentially could produce tens of billions of dollars of revenue, spurring the development of lithium and cobalt mining operations in the country," Michael Tanchum, a senior fellow at the Austrian Institute for European and Security Policy and a non-resident fellow at the Middle East Institute in Washington, recently told The National.
The Taliban plan to unveil a new government in the coming days as the US leaves the country after a 20-year war.