Chinese risk of influence over Afghanistan to harvest their minerals after Biden's disastrous retreat
In a chilly auditorium in Afghanistan, heaps of freshly mined green emeralds glowed under bright table lamps as bearded gemstone dealers inspected them for purity and quality.
An auctioneer asked for bids on the first lot, which weighed 256 carats. With that, the Taliban’s weekly gemstone auction was underway.
These sales, in the emerald-rich Panjshir Province of eastern Afghanistan, are part of an effort by the Taliban government to cash in on the country’s vast mineral and gemstone potential.
Since seizing power in August 2021, the Taliban say they have signed deals with scores of investors to mine gemstones, gold, copper, iron and other valuable minerals, like chromite. These buried treasures offer a potentially lucrative lifeline for a feeble economy.
China has led the way in investments under its Belt and Road Initiative, an aggressive effort to spread Chinese influence worldwide. Russian and Iranian investors have also signed mining licenses, filling the void left by the chaotic U.S. withdrawal in 2021.
The U.S. government estimates that at least $1 trillion in mineral deposits lie beneath Afghanistan’s rugged landscape. The country is rich in copper, gold, zinc, chromite, cobalt, lithium and industrial minerals, as well as in precious and semiprecious gemstones like emeralds, rubies, sapphires, garnets and lapis lazuli.
Afghanistan also holds a trove of rare earth elements, according to the Office of the Special Inspector General for Afghanistan Reconstruction, a U.S. agency that will close this year. Such elements are used in an array of modern technology, like mobile phones, laptops and electric vehicles.
The Taliban are trying to do what the United States could not during its 20-year occupation. The U.S. government spent nearly a billion dollars to develop mining projects in Afghanistan, but “tangible progress was negligible and not sustained,” the special inspector general concluded in a report published in January 2023.
Many of the hurdles from that time could still apply: a lack of security, poor infrastructure, corruption, inconsistent government policies and regulations, and frequent turnover of government officials.
The Taliban are nonetheless giving it a shot, desperate for revenue after Afghanistan’s precipitous loss of aid with the U.S. withdrawal.
During the war, the United States provided roughly $143 billion in development and humanitarian aid to Afghanistan, propping up the U.S.-aligned government. Since 2021, the United States has given $2.6 billion in such aid, delivered by a private contractor in shrink-wrapped cash bundles on flights to Kabul, according to the special inspector general.
The Afghan economy has shrunk by 26 percent over the past two years, the World Bank reported in April. The sharp decline in international aid, the bank said, has left Afghanistan “without any internal engines of growth.”
On top of that, the Taliban’s ban on opium production has cost farmers $1.3 billion in income, or 8 percent of Afghanistan’s gross domestic product, the World Bank said. The ban has led to the loss of 450,000 jobs and reduced land under poppy cultivation by 95 percent, the U.N. Office on Drugs and Crime reported.
Mining could help replace poppies as a steady revenue stream. Turkey and Qatar, along with China and Iran, have invested in iron, copper, gold and cement mines. Uzbek companies have signed deals to extract oil in northern
Afghanistan, according to the Ministry of Mines and Petroleum.
The Taliban are already collecting tax from emerald sales.
Under the previous government, the emerald trade was a corrupt free-for-all. Warlords and politically connected dealers dominated the trade, and tax collection was haphazard at best.
But as the Taliban government has instituted the weekly emerald auctions, it has controlled and taxed all sales. Dealers who buy emeralds at the auctions do not receive the gems until they pay the 10 percent levy.
The Taliban are taxing other precious stones as well, including rubies and sapphires.
Rahmatullah Sharifi, a gemstone dealer who bought two sets of emeralds at the auction, said he didn’t mind paying the tax.
“The government needs the money to develop the country,” he said. “The question is: Will they spend it on helping the Afghan people?”
In Panjshir Province, where most Afghan emeralds are mined, the government has issued 560 emerald licenses to foreign and Afghan investors, said Hamayoon Afghan, a spokesman for the Ministry of Mines and Petroleum.
The ministry has also granted licenses to mine rubies in Panjshir and Kabul Provinces, Mr. Afghan said, and plans are underway for emerald and precious stone licenses in three other provinces.
But many new licenses are for mines that have yet to open. And many existing mines are hobbled by poor infrastructure and a dearth of experienced engineers and technical experts.
Mr. Afghan conceded that the country needed more engineers and technicians. Foreign investors bring in experienced experts, he said, and they are obligated under licenses to employ Afghans and teach them technical and engineering skills.
Most of the emeralds bought at the weekly auctions are resold to foreign buyers, dealers said. Among the dealers buying emeralds one day in November was Haji Ghazi, who sells gemstones from a tiny cell-like room within a darkened warren of shops in downtown Kabul.
Two days after the auction, Mr. Ghazi bolted his shop’s door, closed the curtains and unlocked an ancient safe. He withdrew several caches of emeralds and rubies, each one wrapped in a plain white sheet of paper.
Mr. Ghazi’s largest set of emeralds was worth perhaps $250,000, he said. He estimated that a much smaller cache of bright rubies was worth $20,000.
In a corner, Mr. Ghazi had piled heavy chunks of rock bearing thick blue veins of lapis lazuli, a semiprecious stone. Much of the world’s supply of lapis is mined in northern Afghanistan.
Mr. Ghazi sells most of his gemstones to buyers from the United Arab Emirates, India, Iran and Thailand. He said he missed the days, before the Taliban takeover, when the occupation brought eager buyers from the United States, Britain, France, Germany and Australia.
In an adjacent shop, Azizullah Niyazi switched on a desk lamp to illuminate a collection of lapis lazuli, rubies, sapphires and emeralds spread across a small table. He was still awaiting his first customer of the morning.
Mr. Niyazi said sales were not as robust as during the 13 years he was allowed to sell gemstones one day a week from a small shop on a U.S. coalition military base. His profits soared as soldiers and civilian contractors lined up to buy gemstones every Friday — and they rarely haggled over prices, unlike Afghan or Arab buyers, he said. He paid a 7 percent tax on his profits, he said.
These days, Mr. Niyazi must travel to increase sales: He said he had opened a shop in China, where he made regular visits. In Kabul, he sells to buyers from Dubai, United Arab Emirates, as well as from Pakistan, Iran and a handful of other countries.
He has few Afghan customers.
“Not many Afghans can afford to pay $1,000 or $2,000 for a stone to make a ring,” he said with a shrug.
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