Afghanistan, a former gate to the empires of Shaybanids, Baburids, and Safavids in the XVI century, was once shaped as a buffer between Russian and British empires at the end of the Great Game.

However, the country demonstrated its geostrategic importance when the Soviet Union searched for a route to the “warm waters” of the Indian Ocean through Afghan territory. Nevertheless, since the siege of Isfahan in 1722 that ended with the fall of the Safavids empire, Afghanistan became a graveyard for British, Soviet, and American armies.

All of the actors, similarly and mostly, headed for the mountainous multiethnic Central Asian state to gain a strategic advantage relative to their opponents. But, in the XXI century, China and Chinese companies appeared in Afghanistan in the quest for mineral resources, such as lithium.

According to the Taliban government’s Ministry of Mines and Oil, China’s Gochin company plans to invest $10 billion in the lithium resources of Afghanistan in exchange for 120 000 direct and 1 million indirect jobs.

Notwithstanding the opportunity for economic revival, Hamayoon Afghan, spokesman for the Ministry, reported that they are not in a hurry for a lithium contract.  “We are not in a hurry for the lithium contract, we will not take hurried steps and action in this regard. We are not obliged to give this contract only to China. It’s yet to be known when the contract will be signed and it’s not necessary for the contract to be signed only with China. We will consider our own benefits,” continued the spokesman.

Although the U.S. Defense Department, based on the surveys of American government geologists, estimated the net worth of minerals along with lithium in Afghanistan at $1 trillion a decade ago, the strategic significance of lithium has tripled due to the rise of demand for batteries – the powerhouse for equipment from household commodities to the military technologies.

Revolutionary changes in the automobile industry toward electric energy also doubled the case. Consequently, the Afghan state has once again come to a turning point in its history, whose lithium resources push the country into a prospective future like an oil-rich Gulf state or a struggling economy.

Whether prosperity or a more profound crisis awaits Afghanistan depends on several factors that the Taliban government must resolve.

First and foremost, the US sanctions that isolate Kabul’s foreign trade must be addressed. As long as batteries produced with Afghan lithium remain restricted from further manufacturing, neither electronic device companies nor automobile corporations will be willing to contract with Afghan suppliers.

Lithium, once considered just another resource, has now gained paramount importance due to its role in battery production. The exponential demand for batteries, driven by technological advancements and the electric vehicle revolution, has catapulted lithium into the spotlight.

Afghanistan’s lithium-rich landscape holds the promise of not just economic prosperity but also international relevance in the energy sector. However, as the nation stands at this crossroads, many challenges loom.

The global market awaits Afghanistan’s lithium and demands stable economic and geopolitical conditions. The Taliban government faces the challenge of navigating US sanctions, which currently restrict active foreign trade and hinder the progress of Afghan lithium reaching global manufacturers.

Moreover, the landlocked nature of Afghanistan and the geopolitical complexities of the region pose logistical hurdles. The Iranian port of Chabahar and China’s Gwadar port in Pakistan both have limitations due to sanctions and geopolitical factors.

Security remains a persistent concern. The presence of armed groups and potential disruption along transportation routes can deter potential investors. For Afghanistan to make its mark in the global lithium market, it must create a secure environment encouraging economic engagement.

Afghanistan’s lithium potential, while promising, hinges on smart decisions by its leadership. The nation boasts an advantage in the form of a workforce that has been accustomed to years of hardship, potentially offering low-cost labor.

Strategically, establishing battery manufacturing plants in neighboring Central Asian countries could alleviate transportation challenges and reduce reliance on southern ports. Countries like Uzbekistan, Turkmenistan, and Tajikistan offer viable alternatives.

Secondly, the transportation lines of this strategic material to the global market are logistically unsolved. In addition to the landlockedness of Afghanistan, the closest seaports possess various disadvantages. For example, Chabahar of Iran is another port where ships hesitate to anchor and load due to sanctions.

In the meantime, Pakistan’s Gwadar has been developed by China, which results in re-addressing the same partner that can carry the lithium by land transport through borders.

After all, Afghanistan presents a few opportunities to absorb its lithium resources. On the one hand, cheap labor, which has been impoverishing for decades due to civil wars and Soviet and American invasions, is ready to offer low-cost material at average prices.

On the other hand, battery factories can be located in a Central Asian country (Uzbekistan, Turkmenistan, or Tadjikistan), turning roads to the north rather than southern ports. That way, corporations take ready-to-use lithium batteries to the world market instead of raw materials.

In conclusion, Afghanistan’s transformation from a geostrategic gateway to a potential mineral-rich hub is a pivotal moment in its history. The nation’s lithium resources are key to economic resurgence and global relevance. Yet, the path ahead is fraught with challenges, ranging from sanctions and logistical complexities to security concerns.

The decisions made by the Taliban government will determine whether Afghanistan emerges as a player in the global lithium market or struggles to harness the potential of its strategic resources.

As China strategically invests in Afghanistan’s future, the nation must tread carefully to ensure a prosperous and stable trajectory in the complex realm of strategic minerals.

 

*The author is a Tech & AI policy expert at Eurasian Affairs

**The views expressed in this article are those of the author and do not necessarily reflect the opinions of The Diplomatic Insight. The organization neither endorses nor assumes any responsibility for the content of this article.

Previous articleSAPM Sohrab regards Pakistani diaspora ‘backbone’ of economy
Next articleSpain wins 1st FIFA Women World Cup 2023
TDI
The Diplomatic Insight, Pakistan's premier Public Diplomacy Magazine, has been at the forefront of promoting Peace Through Informed Dialogue since its inception in 2009. With both print and electronic versions, this decade-old media house is offering research, analysis, and public diplomacy outreach to clients in Pakistan and across the globe. TDI is now offering Amazon Kindle Self Publishing Services to diplomats, ambassadors, political leaders, academicians, and other civil society leaders to be the next best-seller authors. With access to 11 global markets and the option to translate your work into 11 languages, you can reach up to 300 million readers worldwide and unlock your personal and country branding.