Afghan retreat hands green energy crown to Beijing on a lithium platter

Already well endowed with key minerals, China is cosying up to the Taliban as the US leaves.

The fallout from the US withdrawal from Afghanistan is a chilling reminder of the US withdrawal from Vietnam in 1975 and of its withdrawal from Iraq, which led to an Islamic State-led massacre of ethnic minorities. There are many implications — for Afghanis, regional stability and global energy security.

I vividly remember the day the US declared war on Afghanistan and the many difficult days that ensued. Children were used as suicide bombers, many military lives were lost and civilian casualties were all too common. More than $1-trillion was spent. We often wondered what it was all for.

But substantial development progress was made during this time. Female enrolment in primary schools increased from zero under Taliban rule to more than 80% in 2018. The number of children enrolled in secondary education jumped from 12% to 55%. The fertility rate dropped from 7.5 to 4.5. A quarter of parliamentary seats were held by women — up from zero in 2001. The number of children who died before age five halved — the fastest reduction across all low-income countries. And life expectancy for Afghans increased by a whopping 10 years.

Now, in a week the Taliban has overtaken the country again and two decades of progress is set to be undone. I ache for the girls and women who are now unable to get an education or employment, for the brutal killings that have taken place and will continue to take place, for the strict Sharia that will bring back public hangings and stonings. I ache for those who frantically jumped onto planes taking off from the Kabul airport, knowing their chances of survival were slim either way.

But the implications extend beyond those faced by Afghanis. Clean energy technology supply chains are now at risk, at a time when decarbonisation is urgent. Afghanistan has mineral deposits worth upwards of $1-trillion, including lithium, copper, cobalt, iron, barite, sulfur, lead, silver, zinc, niobium and 1.4-million metric tonnes of rare earth elements. Its mining sector has largely been untapped thus far.

Many of these minerals are central to the clean energy transition. Lithium and cobalt are critical to make lithium-ion batteries used in electric vehicles. Globally, the production of minerals such as graphite, lithium and cobalt could increase nearly 500% by 2050, to meet the growing demand for clean energy technologies.

This sounds positive — large mineral endowments offer Afghanistan an entry into renewable energy supply chains. But the Chinese are moving in rapidly. Taliban leaders had been meeting Chinese officials in the lead-up to the US withdrawal, and shortly after Kabul fell a spokesperson for China’s foreign ministry said Beijing is “ready to develop good-neighbourliness and friendly co-operation” with Taliban-ruled Afghanistan. On the other side, the Taliban said it looked forward to China’s participation in the reconstruction and development of Afghanistan.

Africa offers a cautionary tale of China’s participation in development. We have already seen China make large infrastructure investments in exchange for access to critical mineral deposits. And China is already well endowed, with overall lithium reserves estimated at 4.5-million tonnes, the sixth-largest globally. In 2019 the country produced 7,500 tonnes of lithium — the third-highest level worldwide. China is also the world’s largest consumer of lithium given its large manufacturing sector that produces consumer electronics and batteries for electric vehicles.

If raw Afghan minerals are exported to China its domination is likely to continue. China has 93 “gigafactories” that make lithium-ion battery cells, while the US only has four. If current trends continue China could have 140 gigafactories by 2030, Europe will have 17 and the US 10. In other words, the withdrawal from Afghanistan will lead to China expanding its near-monopoly over certain clean energy technologies (including solar panel production) and could have negative implications for countries reliant on China for renewable energy imports.

Japan offers an important lesson on why this monopoly can be dangerous. In 2010 China abruptly cut off all rare earth exports to Japan over a fishing dispute. Japan was almost wholly dependent on China for these critical metals and the embargo highlighted a clear vulnerability.

The US is in a difficult spot, as China dominates manufacturing renewable energy against a backdrop of vast human rights abuses resulting from forced labour imposed on minority groups. In July China said its relationship with the US “is now in a stalemate and faces serious difficulties”, while the US has called its rivalry with China “the biggest geopolitical test” of the century.

A US withdrawal from Afghanistan was inevitable. But the implications are likely to be seen for years to come as renewable energy supply chains are in peril.