Report: Chinese firm offers $10 billion to mine lithium in Afghanistan

The Taliban-run government in Afghanistan says a Chinese company has expressed interest in investing $10 billion to mine the country’s massive lithium reserves and help construct other infrastructure there.

Shahabuddin Delawar, head of the Afghanistan Ministry of Mines and Petroleum, made the announcement in a statement after a meeting with representatives of the Chinese company, identified as “Gochin,” which offered to extract the Afghan lithium reserves.

Gochin also voiced its interest in developing other infrastructure, including a hydroelectric dam and a new tunnel in the critical Salang gateway connecting eastern Afghanistan with its northern gateway to China and Russia.

Lithium, a key element of batteries that power electric vehicles, mobile phones, and laptops, is driving the world’s transition away from fossil fuels.

Afghanistan is sitting on vast untapped deposits estimated to be worth $1 trillion or more, including what may be the world’s largest lithium reserves.

Months after the US withdrawal of troops in 2021, a delegation of Chinese companies visited the war-ravaged country to explore lithium mining opportunities as the battery industry is fast-changing.

Lithium prices are down 60 percent from last year’s peak, with China’s CATL, the world’s largest electric vehicle battery manufacturer, beginning to produce sodium-ion batteries — a much cheaper alternative to lithium-ion.

The opportunity in Afghanistan comes after the US, China’s great geopolitical rival, ended its two-decade-long military invasion of the country in 2021. The United States and the Western governments at large have imposed economic sanctions on Afghanistan since the Taliban took control.