Beijing Moves to Leverage Afghanistan’s Mineral Resources

Last week, China’s envoy to Afghanistan revealed that the country would provide the Islamic Emirate of Afghanistan with tariff-free access to its vast consumer, energy, and construction sectors. This statement comes as the Taliban-led country works to strengthen its markets.

China has strived to develop ties with Afghanistan since the Taliban seized control of the country in 2021. However, similar to other governments, the East Asian country has avoided formally recognizing the group’s rule amid global concern over its violation of the rights of women and girls.

Still, Beijing believes that the impoverished nation could provide various minerals to boost its supply chain security, despite the risk that Afghanistan may become a place of refuge for militant groups that threaten the Xinjiang region of China.

Beijing believes that Afghanistan’s iron, copper, and lithium deposits could feed China’s construction and battery industries and, in turn, help the Taliban generate revenue and bolster their economy. Afghanistan’s overseas central bank reserves are still frozen and with a collapsed economy, this deal greatly works in their favor.

In 2023, China imported $64 million worth of goods from Afghanistan, 90% of it being shelled pine nuts.

Even though the country exported no other commodities to China, Chinese Ambassador to Afghanistan Zhao Xing has been posting photos of meetings with Afghan officials in charge of trade, petroleum, and mining since his appointment. In a statement, the Afghan government announced that it was determined to find foreign investors who would help it profit from its mineral resources and diversify its economy.

The co-founder of the China-Global South Project, Eric Orlander, explained that it was possible they were trying to resolve terrorism and security challenges in Afghanistan through economic development. Some Chinese firms already operate in Afghanistan, including the Metallurgical Corp of China Limited.

The company has in the past held talks with the Taliban administration over plans for a copper mine. This was discussed in an August feature in Chinese state media on Chinese firms rebuilding Afghanistan.

This development comes just a month after the President of China Xi Jinping announced at a summit that goods entering his country’s economy from the least developed nations that had diplomatic relations with China wouldn’t be subject to import duties starting December 1.

This policy was reiterated last week by Tang Wenhong, China’s Vice Commerce Minister at a press conference discussing preparations for the country’s upcoming flagship import expo. It was then confirmed two days later by Chinese Foreign Ministry Spokesperson Lin Jian that the policy would apply to Afghanistan.

As China eyes the mineral resources of Afghanistan, many companies like Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are working to develop supply sources of critical minerals in regions which are aligned with America and the West so that the grip that China has over many mineral supply chains can be loosened.

NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF

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