Posted on 08/16/2021 10:56:04 AM PDT by be-baw
After more than a decade of war and nation building, members of the International Security Assistance Force (ISAF) in Afghanistan are heading for the exits. Although what ISAF will leave behind is better than what was there in 2001, Afghanistan remains a battered land. However, the resources Afghanistans land holds copper, cobalt, iron, barite, sulfur, lead, silver, zinc, niobium, and 1.4 million metric tons of rare-earth elements (REEs) may be a silver lining.
U.S. agencies estimate Afghanistans mineral deposits to be worth upwards of $1 trillion. In fact, a classified Pentagon memo called Afghanistan the Saudi Arabia of lithium. (Although lithium is technically not a rare earth element, it serves some of the same purposes.)
Of course, the fact that Afghanistan is rich in minerals is not necessarily new information. The Soviets identified mineral deposits in Afghanistan during their decade-long occupation. What is new is the volume and precision of mineral-related information. Afghanistan has been mapped using what is known as broad-scale hyper-spectral data highly precise technologies deployed by aircraft that, in effect, allow U.S. military and geological experts to peer beneath Afghanistans skin and paint a picture of its vast mineral wealth. According to Jim Bullion, who heads a Pentagon task force on postwar development, these maps reveal that Afghanistan could become a world leader in the minerals sector.
Theres another set of factors at work today that were not present during the Soviet period: REEs are in high demand, the dependability of the REE supply chain is in question, and Afghanistans mineral wealth may be able to help knit the country back together after decades of war.
But simply having a rich mineral endowment doesnt mean that Afghanistan is poised to tap it quickly. Challenges abound.
Supply Chain Worries
The importance of REEs to the global economy cannot be overstated. They are essential to the manufacture of a host of modern technologies, including cell phones, televisions, hybrid engines, computer components, lasers, batteries, fiber optics, and superconductors. Congressional findings have called rare earth elements critical to national security, and understandably so. REEs are key to the production of tank navigation systems, missile guidance systems, fighter jet engines, missile defense components, satellites, and military grade communications gear.
The supply of REEs and similar minerals is critical to todays technology-dependent economy, which is highly dependent on a reliable supply chain. Regrettably, the main supplier of REEs, China, has proven itself undependable.
The Chinese produce 97 percent of the worlds REEs, but have begun to manipulate the global REE market by dramatically slowing, and in some cases halting, export of these materials. After a maritime dispute with Japan, China stopped supplying REEs to Japanese customers, reduced overall global exports by 72 percent in the second half of 2010, cut export quotas for the first half of 2011 by 35 percent, and slashed REE mining permits by 41 percent in 2012, claiming its actions were a function of efforts to fight pollution.
Although Beijing has resumed delivery of REEs, Chinas actions have prompted the United States, Japan, and Europe to explore alternative sources. The good news is that market forces are already at work diversifying the REE supply chain.
Australia has new REE mines coming online, and mines in Brazil, Canada, Vietnam, and the United States could start producing REEs by 2015. Thanks to REE finds, Mongolias GDP is also primed to triple in the next 10 years.
Leverage
Afghanistan can be part of the long term solution to the REE supply problem. However, building a rare earth mining system from scratch in one of the worlds most broken countries will not happen overnight.
Corruption remains a challenge, stability and security exist only in pockets, and the ingredients that encourage foreign investment the rule of law, human capital, and infrastructure are in short supply. For instance, political dysfunction is plaguing efforts to build rail lines considered crucial to transporting Afghanistans mineral wealth.
Yet what Afghanistan lacks in infrastructure, it makes up for in rare earth riches, which explains why some governments are willing to look past the many impediments to development. Of course, those impediments are significant, and removing them will require a commitment within Afghanistan to embrace economic freedom, the foundations of which personal choice, voluntary exchange, freedom to enter and compete in markets, and property rights have yet to fully take root.
Aiming to build up what the Department of Energy calls sizable stockpiles of REEs, Beijing is eager to develop Afghanistans mineral wealth. China has won exploration rights for copper, coal, oil, and lithium deposits across Afghanistan, and there are reports that Beijing won the rights to develop a copper mine by bribing Afghan mining officials.
Make no mistake: China can play an important and constructive role in Afghanistan. Development in Afghanistan can be aided by foreign investment, and Beijing has the resources to make crucial investments in Afghanistans future. But given Chinas stranglehold on the REE market and the Wests commitment in blood and treasure to Afghanistans future allowing China to stroll in and harvest Afghanistans rare earth riches seems both unwise and unfair. Before they withdraw, ISAF nations should use their considerable leverage not to secure sweetheart deals for Western investors and developers, but to ensure a level playing field for any firm willing to take a risk on developing Afghanistans mineral wealth.
Curse or Blessing?
Some observers warn that if Afghanistans mining sector does take off, the country could succumb to the so-called resource curse the notion that natural-resource wealth can actually hinder economic growth by diverting investment away from other sectors and encouraging high levels of government spending.
There are two ways to answer the resource-curse naysayers: First, on a very practical level, the world should be so lucky if the resource curse becomes the main concern for Afghanistana country that has endured and caused so much heartache.
Second, the resource curse may be a bit overblown. A Fraser Institute report found that early studies on the resource curse overlooked the role of economic institutions and the possible interaction between natural resources and the quality of institutions. Nations with economic institutions of higher quality are more capable of managing their resource revenue. To be sure, those institutions remain nascent in Afghanistan. This underscores the importance of policy prescriptions geared toward economic freedom.
Stephen Haber and Victor Menaldo, political scientists specializing in the research of mineral booms, note that roughly twice as many countries have been blessed by resource booms as cursed by them. Citing poor infrastructure, a largely illiterate population, and a weak central government hampered by warlordism, they report that until its late 19th century oil and mineral boom, Mexico was not a whole lot different from Afghanistan.
Oil and mineral discoveries did not cure all of Mexicos ills, of course. To this day, Mexico struggles with corruption, ranking 105th out of 176 countries surveyed on a global corruption index. However, natural-resource wealth did help stabilize Mexicos political system and legitimize the state.
Similarly, there are too many challenges in Afghanistan to think of REEs as a panacea. Political corruption runs high in Kabul; Afghanistans geographic remoteness will always be an issue; and Afghanistans neighbors to the east and west are mischievous, to put it politely. But if something akin to the Mexican model can take root in Afghanistan, then the world can help solve Afghanistans instability problem and Afghanistan can help solve the worlds rare earth supply problem.
The Taliban just wanna celebrate!
And China will step in and take over...
You have to get a lot of equipment in and develop huge regions before getting any product out.
These people don’t care about technology.
All they want is to create a world ruled by Islamic Radicals.
This is the key reason for the sudden uptick in crazy ideas in the USA such as Tranny = Women.
They want the world to believe the entire USA is filled with infidel who need to be eradicated.
Thus now the stage has been set, Biden will fly in the players and then terrorism that we have never seen will show up on our doors.
Herro chi-nuh!
The Chinese don’t need to mine the REE - they just need to keep them off the world market.
Not only rare earth metals, Afghanistan has the most desirable precious stones in the world.
China isn’t going to worry about any ecological impacts. They will destroy what ever they want to get to rare earth elements. They will poison the rivers with mine tailings and the locals won’t be able to do anything about it.
And the Taliban won’t be able to do anything, the Chinese will bring enough military with them to protect the mines.
There are plenty of REE deposits all over the Western Hemisphere, but ZERO desire to mine them. Because, the planet, the climate, blah blah blah.
YEP. The only "advantage" to mining in Afghanistan would be that their government environmental impact studies would likely be very quick!
Otherwise, you have to invest $500 million to build roads, power plants, get water, educate illiterate workers, maintain security, bribe warlords - and hope that in 8 years when its all ready to begin production, the market gives you a profit for all your sunk costs!
I don't think even the CCP is ready for that.
Rare earth elements are not that rare. They are actually rather common. Sulfur is not a rare earth element since it has no industrial value except in fertilizer and matches. The rest of those listed are rather plentiful in North America but we can’t get them because of environmental concerns. We rely on China for most of them. They don’t have environmentalists because they would use their environmentalists as organ donors.
And the PRCs wanting an even larger strangle hold on those elements is sitting in waiting with a YUGE SMILE on their faces!
Not to mention hundreds of square miles of poppy fields.
That’s fine. I don’t mind them spending money for no net gain.
China does not buy resources; they buy politicians (and warlords), then they get the resources for free.
Yep. And “The Big Guy” gets his cut from the Chinese. It is no coincident China was there before Biden’s surrender. It was planned to enrich the Biden family and his political cronies.
Yup, you get what’s going on there!!
Yup!!
Well at least China won’t go around demanding the Taliban include women in their government, like our government is.
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