Backed by China, Afghanistan’s Mining Revenue Witnesses Six-Fold Spike

Afghanistan’s mining and petroleum revenues have witnessed a six-fold increase in the last year, a statement from the Taliban* said on Monday.

The total revenues this year topped $195 million.

The statement underscored that the Afghan authorities have redoubled efforts to identify and survey new mines, as well as attract foreign direct investment (FDI) in new projects.

The Taliban further expressed hope that copper mining at Mes Aynak in Logar province will begin this year.

The interim Afghan authorities also called for “progress in the implementation” of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project.

The Mes Aynak mine has one of the biggest deposits of copper in the world. In 2008, the then-government led by Hamid Karzai signed a 30-year, multi-billion-dollar contract for the extraction of copper from the mine.

However, the security situation in Afghanistan has prevented considerable progress in the project. The Taliban has backed the idea of going ahead with the 2008-era contract on the same terms.

The 1,100 kilometer-long pipeline project has also faced delays due to the security situation in Afghanistan. Since regaining power in Kabul, the Taliban has called for resuming work on the central Asian energy project.

In January, the Taliban signed its first commodity extraction pact with a foreign company after the authorities signed a deal with state-backed Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) for the extraction of oil from the Amu Darya Basin.

Last year, the Taliban also began negotiations with another Chinese state-backed Yellow River Engineering Consulting Company Limited for building a gas-to-electricity project.

A joint cooperation agreement has already been signed with the Chinese company for its investment into the project, as per the Taliban.

Mullah Abdul Qahir Idris, Afghanistan’s Interim Deputy Minister of Energy, met representatives of Yellow River Engineering to discuss “acceleration of the implementation of the project”, as per a Taliban statement on Monday.

Beijing has backed the idea of extending the China-Pakistan Economic Corridor (CPEC) in Afghanistan, though it has held concerns about the security situation in the central Asian state. The CPEC has been described as the flagship project of the Beijing-backed Belt and Road Initiative (BRI), a network of infrastructure and connectivity projects across the globe.

In spite of growing economic engagement with the Taliban, Beijing is yet to officially recognize the leadership in Kabul. China is one of the several countries to have a diplomatic presence in the country.