MES AYNAK, Afghanistan (AP) – Ancient Buddha statues sit in quiet meditation in caves carved into the rust-red cliffs of rural Afghanistan. Hundreds of meters below lies what is probably the largest copper deposit in the world.
Afghan Taliban rulers are pinning their hopes on Beijing to turn this rich vein into revenue to bail out the money-starved country amid crippling international sanctions.
The fighters who stood guard on the rocky slope may have once considered destroying the terracotta Buddhas. Two decades ago, when the radical Islamist Taliban first took power, they sparked global outrage by blowing up giant Buddha statues in another part of the country, describing them as pagan symbols in need of cleansing.
But now they want to preserve the relics of the Mes Aynak copper mine. This is key to unlocking billions of dollars in Chinese investment, said Hakumullah Mubariz, the Taliban security chief on the ground, looking into the remains of a monastery built by first-century Buddhist monks.
“Your protection is very important to us and the Chinese,” he said.
Previously, Mubariz commanded a Taliban combat unit in the surrounding mountains fighting US-backed Afghan forces. When those troops surrendered last year, his men rushed to secure the compound. “We knew it was going to be important for the country,” he said.
The Taliban’s spectacular turnaround illustrates the powerful pull of Afghanistan’s undeveloped mining sector. Successive authorities have viewed the country’s mineral resources, valued at $1 trillion, as the key to a prosperous future, but none have been able to tap them amid ongoing war and violence. Now several countries, including Iran, Russia and Turkey, want to invest and fill the vacuum left by the chaotic US withdrawal.
But Beijing is the most assertive. In Mes Aynak, it could become the first major power to take on a large-scale project in Taliban-controlled Afghanistan, possibly redrawing the geopolitical map of Asia.
HIGHEST PRIORITY
In 2008, Hamid Karzai management signed a 30 year contract with a Chinese joint venture called MCC to extract high grade copper from Mes Aynak. Studies show that the site contains up to 12 million tons of the mineral.
But the project was mired in logistical and contractual issues, and it never got past a few initial test shafts before stalling when Chinese workers left in 2014 due to ongoing violence.
Just months after the Taliban took Kabul in August and consolidated control of the country, the group’s newly installed acting Minister of Mines and Petroleum, Shahbuddin Dilawar, urged his staff to re-engage Chinese state-owned companies.
Ziad Rashidi, the ministry’s director of external relations, approached the consortium of MCC, China Metallurgical Group Corporation and Jiangxi Copper Ltd. Dilawar has had two virtual meetings with MCC in the past six months, according to company and ministry officials. He urged them to return to the mine on terms unchanged from the 2008 contract.
An MCC technical committee is scheduled to be in Kabul in the coming weeks to address the remaining obstacles. Relocating the artifacts is key. But MCC is also trying to renegotiate terms, specifically to cut taxes and cut by almost half the 19.5% royalty, the percentage owed to the government per tonne of copper sold.
“Chinese companies see the current situation as ideal for them. There is a lack of international competitors and a lot of support from the state,” said Rashidi.
China’s ambassador to Afghanistan said talks were ongoing but no longer.
Acquiring rare minerals is key for Beijing to maintain its position as a global manufacturing hub. While China does not recognize the Taliban government, it is distinguishing itself from the international community by demanding the release of Afghan assets and maintaining its diplomatic mission in Kabul.
For Afghanistan, the contract at Mes Aynak could bring in $250 million to $300 million a year in government revenue, a 17% increase, and $800 million in fees over the term of the contract, according to government and business officials. That’s a significant sum as the country grapples with widespread poverty, exacerbated by financial constraints after the Biden administration froze Afghan assets and international organizations shut down donor funds. Some have since been reinstated.
CEMETERY OF THE RICH
In Mes Aynak, a 2,000-year-old Buddhist city sits awkwardly next to a potential economic engine. Afghanistan’s tumultuous modern history has stood in the way of both archeology research and mine development.
Discovered by French geologists in the 1960s, the site has been considered an important stop along the Silk Road since the early centuries AD.
After the Soviet invasion in the late 1970s, the Russians dug tunnels to explore for copper deposits. the cavernous drill holes are still visible. These were later used as an al Qaeda hideout, and at least one was bombed by the US in 2001.
Looters then looted many antiquities from the site. Nonetheless, archaeologists who came in 2004 managed a partial excavation that uncovered remains of a vast complex, including four monasteries, ancient copper workshops and a citadel. It became clear that the area had been a large Buddhist settlement, a crossroads for traders from the West and pilgrims from afar, even from China.
To the shock of non-Taliban technocrats at his own ministry, Dilawar is campaigning to save the site and told the MCC director in Beijing it was an important part of Afghanistan’s history, according to two officials present at a virtual meeting .
He opposed open pit mining plans that would completely destroy the site. The alternative option of underground mining was judged by MCC to be too expensive. The Ministry of Culture has been commissioned to come up with a plan to move the relics, most likely to Kabul’s museum.
“We have already transferred some (artifacts) to the capital and we are working on transferring the rest so mining can begin,” Dilawar told The Associated Press.
While the ministry is optimistic that an agreement can be reached, MCC officials are cautious and pragmatic.
They did not speak to the AP on record, citing sensitivities surrounding the talks while international sanctions still prohibit dealings with the Taliban.
They raised concerns about the feasibility of other contractual commitments, including building a railway to the Pakistan border at Torkham, a coal-fired power plant and community facilities such as a hospital and schools.
Compensating residents of three villages near Mes Aynak that were evicted a decade ago is another issue.
Mullah Mera Jan, a 70-year-old local elder, said he was still waiting for funds promised to him by ministry officials after he was evicted from his village, Wali Baba.
Nevertheless, he also hopes for a speedy dismantling. The villagers were promised 3,000-4,000 direct and 35,000 indirect jobs. The men from his village are at the top of the recruitment list.
OPEN FOR BUSINESS
In the labyrinthine halls of the ministry, hopeful investors are lining up, documents ready, to stake their claims on Afghanistan’s untapped mineral resources, including vast deposits of iron, precious stones and – possibly – lithium.
Russians, Iranians, Turks and, of course, the Chinese are knocking on Rashidi’s office door these days.
All are “in a great hurry to invest,” he said. Chinese interest is “extraordinary,” he said. Rashidi has also approached China’s CNPCI to revise an oil contract to explore for blocks at Amu Darya near the border with Turkmenistan, which was canceled in 2018.
Dozens of small orders have been awarded to local investors, many of whom have joint ventures with international companies, mostly Chinese and Iranian.
The ministry’s revenues have grown exponentially, from 110 million Afghans ($1.2 million) in the year before the Taliban takeover to 6 billion Afghans ($67 million) in the six months since the Taliban took power, according to documents obtained by AP. However, most of this seems to have come from more aggressive taxation as the Taliban merged their informal tax economy with that of the government. Aside from coal, it’s not clear if actual mining production has increased.
Ironically, it was the Taliban who hampered work at Mes Aynak for over a decade.
An MCC official recalled that the road leading to the mine was laden with IEDs aimed at Afghan forces and NATO allies. An entire Afghan regiment guarded Chinese engineers at the site. Mubariz, now the security chief, said he remembered watching them from the mountains where he was planning attacks.
The MCC official said that when his Taliban hosts told him they had restored security so work could resume, he jokingly replied, “Wasn’t it you who attacked us?”
The men with the machine guns around their necks laughed too.