Beyond the dire humanitarian situation now created in Afghanistan after its fall to the Taliban, some of the spotlight has been on the country’s untapped wealth of mineral resources – resources that, if ever developed, could greatly improve the country’s economic destiny.
According to the Human Development Index (HDI), Afghanistan is one of the poorest countries in the world. It is ranked 100th in the world in terms of GDP and 211th in terms of GDP per capita. But in 2010 U.S. military officers and geologists discovered something that could greatly change the Afghan economy: The country’s lands, it has been discovered, contain mineral resources worth about a trillion dollars.
Geologists have discovered that deposits of metals such as iron, copper and gold exist throughout the Afghan provinces. It has also been discovered that the earth also hides rare elements, including, perhaps most importantly, what may be the world’s largest accumulator of lithium – an essential and rare component in rechargeable batteries and other technologies essential to the war on climate crisis.
Security challenges, lack of infrastructure and equipment and cases of severe drought have prevented the extraction of the most valuable minerals in the past. The chances of this changing under Taliban rule are quite low but there are countries such as China, Pakistan and India that are already showing interest and may try to work with the Taliban to get the minerals out of the ground, despite the general chaos and undemocratic rule that is expected to arise in the country.
Gloomy economic forecasts
The economic forecasts for the country are quite dismal. As of 2020, about 90 percent of Afghans live below the government.defined poverty line, a wage of $ 2 a day, according to a report by the Congressional Research Department released in June. And is shaped by dependence on aid. “
“Insecurity, political instability, weak institutions, inadequate infrastructure, high corruption and a difficult environment for businesses still make it difficult for private sector development and economic diversity,” it said.
Demand for metals like lithium and cobalt, as well as rare elements like neodymium, is skyrocketing in countries seeking to switch to electric vehicles and other clean technologies in order to cut carbon emissions.
The International Energy Agency said in May that without significant growth in global reserves of lithium, copper, nickel, cobalt and other rare elements the world would not be able to resolve the climate crisis.
The U.S. government has estimated that lithium deposits in Afghanistan may be as large as those in Bolivia, the country with the largest reserves known today.
Resources will be directed to other channels
Most of this mineral wealth of Afghanistan remains buried in the ground. While there has been mining of gold, copper and iron, the extraction of lithium and other rare minerals requires much more investment, technical knowledge and time. The International Energy Agency estimates that an average of 16 years pass from the moment the mineral deposit is discovered until the actual start of mining.
Currently, minerals in Afghanistan produce only $ 1 billion a year. It is estimated that between 30% and 40% are stolen in cases of corruption, by mercenaries and the Taliban, which oversees small.scale mining projects.
While there is a chance that the Taliban will use its new power as the country’s ruler to develop the mining sector, it does not seem to happen given that its initial attention, and that includes its financial resources, will have to devote to a wide range of humanitarian and security matters.
Attracting private capital will be even more difficult now, especially as many international companies and investors adhere to even higher standards in the fields of environment, society and governance.