China could align with Taliban and attempt to mine rare earth metals from Afghanistan (analyst)

Afghanistan is estimated to have trillions of dollars worth of rare earth metals, and countries – like China – that may seek to pounce on the country must follow international terms, an analyst told CNBC.

Shamaila Khan, director of emerging market debt at AllianceBernstein, said the Taliban insurgents have emerged with resources that are a “very dangerous proposition for the world,” with minerals in Afghanistan that “can be mined.”

Afghanistan fell to the militant Islamist group over the weekend as it captured the capital Kabul as well as the presidential palace. After President Joe Biden’s decision in April to withdraw US troops from Afghanistan, the Taliban made dramatic strides on the battlefield – and almost the entire nation is now under insurgent control.

The international community should put pressure on China, for example, if it seeks to ally with the Taliban, Khan added.

“It should be an international initiative to ensure that if a country agrees to mine its minerals on behalf of the Taliban, to do so only under strict humanitarian conditions where human and women’s rights are preserved in the situation.” , Khan said. told CNBC’s “Squawk Box Asia” Tuesday.

The harsh interpretation of Islam by the Taliban meant that women’s rights were curtailed, before the United States toppled their regime in 2001.

Afghanistan has rare earth elements such as lanthanum, cerium, neodymium, and veins of aluminum, gold, silver, zinc, mercury and lithium, according to Katawazai. Rare earths are used in everything from electronics to electric vehicles, satellites and airplanes.

“So there should be pressure on China if they want to make alliances with the Taliban in order to generate economic aid for them – let them do so on international terms,” ​​Khan said. She was responding to a question about the commercial motivation behind China’s nod to the Taliban a day after militants took control of the country – given the trillions of dollars in rare earths there.

Just hours after the Taliban invaded Afghanistan, a foreign ministry spokeswoman said Beijing was ready for “friendly cooperation with Afghanistan.”

“Based on full respect for the sovereignty of Afghanistan and the will of all factions in the country, China has maintained contact and communication with the Afghan Taliban and played a constructive role in promoting the political settlement of the Afghan question, ”said spokeswoman Hua. Chunying at a press conference on Monday.

According to Hua, the Taliban have declared “on several occasions” that they “look forward to China’s participation in the reconstruction and development of Afghanistan.”

“We are ready to continue to develop good neighborliness and friendly cooperation with Afghanistan and to play a constructive role in the peace and reconstruction of Afghanistan,” Hua said.

At the end of July, before the last Taliban blitz in Afghanistan, Chinese Foreign Minister Wang Yi met in Tianjin a delegation headed by the head of the Afghan Taliban political committee, Mullah Abdul Ghani Baradar.

In recent days, Chinese state media have appeared to echo similar sentiments at the Foreign Ministry. The Global Times published an article on August 15, citing Chinese experts, saying that speculation that China might send troops to fill the vacuum left by the United States was “completely unfounded.”

However, the public tabloid stressed that the country can “contribute to post-war reconstruction and development, by advancing projects under the Belt and Road Initiative proposed by China.” The BRI is a massive infrastructure investment plan to build rail, road, sea and other lines stretching from China to Central Asia, Africa and Europe.

China dominates the global rare earth market. About 35% of the world’s rare earth reserves are in China, the highest number in the world, according to the United States Geological Survey.

The country is also a mining machine, producing 120,000 metric tons or 70% of total rare earths in 2018, compared to the United States which mined 15,000 metric tons of rare earth in the same year, he said. .

US reserves are also pale compared to China. The United States has a total of 1.4 million metric tonnes of reserves, compared to 44 million metric tonnes of reserves in China.

China used rare earths as a threat in its trade war with the United States in 2019, when Beijing called for a restriction on exports of rare earth minerals to the United States. Rare earth minerals are commonly used in high tech devices, automobiles, clean energy, and defense.

The United States was heavily dependent on China for rare earths in 2019, when the Asian country exported 80% of American needs, according to the US Geological Survey.

– CNBC’s Natasha Turak and Yun Li contributed to this report.