Tehran – The long-standing war, occupation and anarchy have been blamed for Afghanistan’s natural resources for lack of investment and technology transfer. According to US and UN assessments, minerals buried in Afghanistan’s rocky landscape are estimated to be worth $1 trillion.
Today, emeralds, rubies, marble, gold, lithium and other mineral resources remain unpowered. “We have no exports, no infrastructure, no knowledge,” said Homayon Afghan, a spokesman for the Ministry of Mines.
The Taliban fought two years of rebellion against the US-NATO-backed Afghan government in Kabul, and took power in a military campaign in 2021 after foreign troops retreated.
Critics say China will use the void left by the withdrawal of Western foreign troops to become Afghanistan’s number one foreign direct investment (FDI) partner.
The Taliban first ruled Afghanistan between 1996 and 2001. In the aftermath of the 2001 September 11 terrorist attack, they were overthrown into American-backed Western troops. However, the group returned to power following the vacuum left by the 2021 withdrawal of the Western Army. The country was named the Islamic Emirate of Afghanistan. So far, no international government recognizes the Taliban as a legitimate government in Afghanistan.
The cash-bound Afghan government was keen to exploit the country’s vast and profitable mineral deposits. Advantageous contracts to tap minerals such as chromite used in gold, gems and steel production have gone to local Afghans and Chinese investors.
China is yet to recognize the Taliban-led Afghan government, but Beijing is calling for the lifting of sanctions against Afghanistan, allowing the Taliban to access the roughly $9 billion reserves held in international accounts. Access to central bank sanctuaries held by US banks was frozen during the administration of former President Joe Biden.
Afghanistan is also in a critical region for China’s Belt and Road Initiative (BRI).
Promoting trade with neighboring Afghanistan is a priority for China. According to media reports, Kabul Zao Singh’s Beijing envoy wrote about his official X-account last October: During the recent tariff wars launched by US President Donald Trump, a Chinese envoy’s statement provides the Taliban government with tariff-free access to the Chinese market, including the construction and energy sector.
The first significant foreign investment contract for Afghanistan, led by the Taliban, came in January 2023 when Chinese company New Jiang Central Asia Oil and Gas Co. (Capeic) signed an agreement to extract the oil and develop an oil reserve in Afghanistan’s northern province of Sar-Pul.
“The Cape will invest 150 MA years in Afghanistan under the contract,” Zabihullah Mujahid, a spokesman for the Taliban-run government, told Twitter.
That investment will increase to $540 million over three years on a 25-year contract, he said.
The Taliban-Run administration can have a 20% partnership on the project and increase it to 75%, Mujahid added.
So far, around 200 mining contracts have been signed between Afghanistan and various Chinese companies, creating around 150,000 jobs in the mining sector since 2021.
The United States remains the world’s largest economy, but China overtook us in 2015 to become the world’s largest crude oil importer. Afghanistan’s lithium, copper and iron exports to the world’s largest commodity buyers will help the Taliban strengthen its vulnerable economy with much-needed revenue streams.
In another development in the mining sector, China-based SCMP.com reported that it is one of the Taliban governments, one of the world’s largest copper mines, after a 16-year delay, after a groundbreaking ceremony was held last summer (July 2024) and after consultations with the state-owned China Metallurgy Co., Ltd. (MCC) ended. Afghanistan has the world’s second largest copper deposit, with key inputs for electric vehicle batteries and semiconductors. A $3 billion contract was signed in 2008, giving the state-run MCC 30 years of mining concessions, but the project was delayed by 16 years due to combat between NATO-led troops and Taliban rebels.
Afghanistan has considerable crude reserves, with production focusing primarily on the Amdarya Basin. The Amdarya Basin is an area covering 4,500 square kilometers in the north of Sal-E Pal, Jaujan and Fariyab provinces. The oil reserves are estimated to be 87 million barrels. In this case, the first major FDI deal for oil extraction since the Taliban acquisition was signed in January 2023. The contract was signed between the former Mines Minister and Oil Sheikh Shahabdin Delawar and Cape officials.
“Over 3,000 people will get jobs in this project,” Al Jazeera News Agency quoted Delawar. He added that the terms of the contract are that oil will be processed in Afghanistan.
Turkmenistan and India have also reached out to Taliban-led Afghanistan to invest in a variety of projects, Caspian News reported. Last September, Turkmenistan’s Foreign Minister Rashid Meredou announced that Ashgabat had invested more than $1.5 billion in a joint project with Afghanistan. Meredou has invited India, Pakistan, International Bank and Asian Development Bank to invest in the Turkmenistan, Afghanistan, Pakistan India (TAPI) gas pipeline project. The pipeline transports gas from Turkmenistan to Pakistan and India, passing through several Afghan provinces.
India has invested more than $300 million in Afghanistan, primarily in infrastructure projects, for the past 20 years. An example is the construction of the Zarani Delaram Expressway in southwestern Afghanistan, completed in 2009, linking Afghanistan with Iran’s Chabahar port.
Bilateral trade between Iran and Afghanistan reached $3.366 billion at the end of last year’s Iran (March 21, 2025). Iran has already invested in Afghanistan’s mining sector, particularly the Goliath mine in Herat.
At the table is the establishment of a special joint mineral economic zone between the two countries.
Conclusion
If the Taliban can kickstart the mining sector in Afghanistan, they will succeed if 20 years of Western-backed initiative flops.