China might ally itself with the Taliban and attempt to exploit Afghanistan’s uncommon earth metals: Analyst

Afghanistan has an estimated trillion dollars worth of rare earth metals, and countries – like China – that may attempt to invade the country must comply with international conditions, an analyst told CNBC.

Shamaila Khan, director of emerging market bonds at AllianceBernstein, said the Taliban insurgents had emerged with resources that were “very dangerous to the world,” with minerals in Afghanistan that were “exploitable.”

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

For example, the international community should put pressure on China to ally with the Taliban, Khan added.

Afghanistan’s rare earth minerals

So pressure should be put on China if they form alliances with the Taliban to provide them with economic aid – on international terms.

Shamaila Khan

Emerging Markets Director, AllianceBernstein

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

The Taliban’s harsh interpretation of Islam resulted in women’s rights being curtailed before the US overthrew its regime in 2001.

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

“So pressure should be put on China when they form alliances with the Taliban to provide them with economic aid – that they do so on international terms,” ​​said Khan. She responded to a question about the commercial motivation behind China’s allusion to the Taliban the day after the militants took over the country – given the trillions of dollars worth of rare earths.

China ready for a bigger role in Afghanistan?

Just hours after the Taliban overran Afghanistan, a Foreign Ministry spokeswoman said Beijing was ready for “friendly cooperation with Afghanistan.”

“Based on full respect for Afghanistan’s sovereignty 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 solution to the Afghan issue,” said spokeswoman Hua. Chunying at a press conference on Monday.

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

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

In late July, ahead of the latest Taliban attack in Afghanistan, China’s Foreign Minister Wang Yi met in Tianjin with a delegation led by the head of the Afghan Taliban’s political committee, Mullah Abdul Ghani Baradar.

Chinese state media appeared to have expressed similar views as the Foreign Ministry in recent days. The Global Times published an article on August 15 quoting Chinese experts. Speculations that China could send troops to fill the vacuum left by the US are “completely unfounded.”

However, the state tabloid noted that the country “can contribute to post-war reconstruction and development and advance projects under China’s proposed” Belt and Road “initiative.” The BRI is a gigantic infrastructure investment plan to build rail, road, sea and other lines that stretch from China to Central Asia, Africa and Europe.

China’s dominance in the world’s rare earths

China dominates the rare earth market worldwide. According to the United States Geological Survey, about 35% of the world’s rare earth reserves are in China, most of the world.

The country is also a mining machine that produced 120,000 tons, or 70% of all rare earths in 2018, compared to the U.S., which mined 15,000 tons of rare earths in the same year, it said.

The US reserves also pale compared to China. The US has a total of 1.4 million tons of reserves compared to 44 million tons of reserves in China.

China used rare earths as a threat during its trade war with the US in 2019 when Beijing threatened to cut off supplies to the US Rare earths are widely used in high-tech equipment, automobiles, clean energy, and defense.

The US was heavily reliant on China for rare earths in 2019 when the Asian country exported 80% of US supplies, according to the US Geological Survey.

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