Almost 10 years back, Taliban destroyed statues of Buddha in Afghanistan’s Bamyan province and now around 1000 workers are working hard to excavate artifacts at another Buddhist site in the country before a Chinese mining company takes over the area to develop a copper mine.
Mes Aynak (meaning little copper well), located 25 miles south-east of Kabul in Logar province, has world’s second-biggest unexploited copper mine with an estimated 240 million tons of ore.
There is a race now to control natural resources in Afghanistan after reports emerged that one of the most impoverished country in the world is sitting on an estimated mineral deposits of $1 trillion.
In what is termed as the biggest non-military investment in Afghanistan, China’s state-owned China Metallurgical Group Corp. signed a 30-year deal worth $3 billion with the Karzai government to extract copper from the site.
The copper mine will also create much-needed employment opportunities in the area. According to an NBC report, “the Chinese are also building roads, the first national railway, and new homes for those displaced from the mining area.”
The copper mine in Mes Aynak point towards a different kind of conflict that is emerging in war-torn Afghanistan. The copper mine contract going to a Chinese company was a blow for Indian companies like Hindalco, which faces a shortfall in copper ore.
There is a race now to control natural resources in Afghanistan after reports emerged that one of the most impoverished country in the world is sitting on an estimated mineral deposits of $1 trillion.
The next contest for control of resources between India and China in Afghanistan will happen soon as the bidding process for developing Hagijak iron ore mine in Bamiyam, Wardak, and Parwan provinces is open.
A New York Times report states many US official believe that Afghanistan could be one of the most important mining centers in the world given its huge reserves of iron, copper, cobalt, gold, critical metals like lithium, and other minerals.
So while a lot of countries, including India, have begun efforts to get contracts in Afghanistan, China already has a head start when the future deals are negotiated.
India is already providing over $1 billion of aid to the Afghan government. The projects funded or undertaken by Indians covers almost all parts of Afghanistan. The sectors where the Indian government is undertaking projects include hydro-electricity, power transmission lines, road construction, agriculture and industry, telecommunications, information and broadcasting, education and health.
The next contest for control of resources between India and China in Afghanistan will happen soon as the bidding process for developing Hagijak iron ore mine in Bamiyam, Wardak, and Parwan provinces is open. According to Afghan officials, the area an estimated iron ore of 1.8 billion tons and is the largest untouched iron deposit in Asia.
Afghanistan has invited 22 companies, 15 from India, to bid for the project. The problem for India is not just bidding for upcoming projects in Afghanistan but security too as most of the mineral deposits are close to Taliban-controlled Pakistan border. It will be a huge security challenge for the Indian companies to operate in this area.
China has always pursued opportunities aggressively. It has already pipped India by investing heavily across the African continent. Indian policy planners now will have to evolve a strategy to counter the Chinese in Afghanistan.
And even if Indian firms win contracts to develop mineral deposits in Afghanistan the biggest hurdle they might face is how to take the material out of the country. India has two options and both are equally challenging.
- Will Pakistan let Indian companies to carry their goods through its territory. If Pakistan allows that it too could earn transit revenues but given the nature of its relationship with India, would it agree to such an arrangement. India’s extensive engagement in Afghanistan is already bothering Pakistani security planners. The route via Pakistan is shortest but is vulnerable in terms of security. Will Pakistan guarantee security for Indian goods on this route? There are no easy answers to these questions.
- The other option before the Indian companies is to take the Iran route. With the hope of gaining access to the Chahbahar port, India has already built a highway to the Iran border in Afghanistan. The problem, however, is the edgy relations between Afghanistan and Iran, apart from the not-so-good India-Iran relations at the moment. Also, Indian companies may be reluctant to operate via the Iran route to be in the good books of the US.
So, despite the fact that India enjoys a huge amount of goodwill in Afghanistan because of its developmental projects there, it will not be easy for it to translate that into economic benefits as China does. If, for instance, US decides to leave Afghanistan and Taliban again takes control, it will be impossible for India to operate there but China can still find a way out and keep a firm foot in the country.
While the US and other NATO countries continue to commit troops and other resources to stabilize Afghanistan, the real beneficiary of this stability and the mineral resource boom will be China.
Will Pakistan let Indian companies to carry their goods through its territory.
Apart from that Chinese companies like Huawei and ZTC are already working on telecom projects in some Afghan provinces. The Chinese area also undertaking several infrastructure projects in the country.
China has always pursued opportunities aggressively. It has already pipped India by investing heavily across the African continent. Indian policy planners now will have to evolve a strategy to counter the Chinese in Afghanistan.
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