Monday, June 14, 2010

"Vast Minerals" in Afghanistan

Hoo boy.

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.
An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

The vast scale of Afghanistan’s mineral wealth was discovered by a small team of Pentagon officials and American geologists. The Afghan government and President Hamid Karzai were recently briefed, American officials said.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.
Well, so much for Afghanistan developing any sort of agriculture or manufacturing capabilities. That whole "Saudi Arabia of minerals" line shows where things are going: a small number of (ludicrously corrupt) officials and connected family members will gain staggering amounts of wealth, while the rest of the population suffers equally staggering destitution.

In fact, it's probably worse than that. Minerals are an easily fungible resource: you can sell them to just about anybody with relative ease. You know what else is an easily fungible resource? Diamonds. You know why "blood diamonds" exist? Because if you have an easily fungible resource, people can and will fight over it. They'll fight to acquire it, and they'll exploit it to fund the fights they already have. It's already happening in Afghanistan with drugs—another easily fungible resource—and now we'll have minerals added to the mix.

But it gets even more interesting when you add Great Powers to the mix:

At the same time, American officials fear resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth, which could upset the United States, given its heavy investment in the region. After winning the bid for its Aynak copper mine in Logar Province, China clearly wants more, American officials said.
 What the American officials aren't saying is that China is far better than they at signing deals to exploit these resources. The Americans talk about how it will take "decades" to build up a mining industry in Afghanistan. That's short-sighted. If the resources really are as rich as claimed, China will simply do the same thing that they did in Africa: pour as much money and manpower as necessary to build up those capabilities now.

That is assuming the Chinese are allowed to do so in the first place.  The U.S. Government (and its various private-sector allies) will want the rights to exploit these resources. They know that China will want them too, and there are a lot of people in Washington who are very, very concerned about China and its ambitions.  This is going to lead to powerful, vicious battles over whether or not to stay in Afghanistan, and the extent to which Karzai will be allowed to behave as an independent actor.

Rest assured, if Karzai starts making noises to the P.R.C. about striking a deal, you better believe that Washington will react, considering that his government exists thanks to their blood and treasure. It may yank the chain and force Karzai to be brought to heel. Yet if he does strike a deal, Washington may also be powerless to do anything about it; they can't provoke a conflict with China over this, especially if China offers a better deal.

It might be a tougher decision for Karzai than you'd think. China will not only provide more resources with less fuss, but they aren't going to care about corruption in his government, or the structure of his society. They won't think twice about helping him brutally put down the Taliban in a way that Americans would find unacceptable, and he would know that he'd be fairly safe from American intervention as long as the Chinese were active there.

The same would be true for a Taliban government, of course, which is the rub. Washington wants his government to succeed because it is their creation. China has no loyalty to his government, nor would China care at all about its continuance beyond its own economic interests. If he failed in putting down the Taliban (or whoever else) and they took over, they would just make the same deal with the new rulers. He would find himself with no real allies at all.

Still, at the moment, the debate is academic. NATO is still in Afghanistan. NATO is likely to stay in Afghanistan for a while yet. NATO may ensure that exploitation rights are secured by their own, and that China is kept outside the gates. Even so, this just got far, far more complicated. And more than a little scary.

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