While US citizens in the country were waiting to hear from the White House, China and Iran moved to recognize the Taliban as a legitimate leader of the country and are already making plans to exploit Afghanistan’s vast natural resources.
Not only was the Biden administration ill prepared for an orderly withdrawal from Afghanistan from a military standpoint, leaving planes and equipment for the Taliban's taking, but it also failed to think of the longer-term economic consequences of allowing China and Iran to rebuild and control Afghanistan. This disaster will have far-reaching implications not only for the safety of the country and people, but also for our longer-term economic benefit.
China, according to reports, is starting to cut deals to mine and control Afghanistan's natural resources that are worth several trillion dollars. The Global Times reported that a Chinese consortium was awarded a contract to develop the world’s second-largest copper mine in the country and is planning to return after years of delay as Beijing seeks closer ties with the Taliban.
"We would consider reopening it after the situation is stabilized and international recognition, including the Chinese government’s recognition of the Taliban regime, take place," an unnamed source at the state-owned China Metallurgical Group Corp (MCC Group) told the Global Times, a party-run newspaper.
China, of course, is already a major player in rare earth minerals, something that the Biden administration desperately needs to meet its green energy goals. Biden is a big believer in electrifying most of the U.S. car and truck fleet and will need to rely on massive amounts of rare earth minerals that are going to be mainly controlled by China. That is especially true if it starts developing those minerals along with the Taliban government.
Afghanistan not only has copper, cobalt and other rare earth deposits, but it also has the world’s largest supply of lithium, a critical and irreplaceable element to build batteries for electric cars. China right now has the capacity to process 85% of the world's rare earth minerals by controlling the supplies in Afghanistan. It will be able to control global prices and potentially withhold supplies to the United States and to United States companies. If you thought OPEC was bad when it came to controlling oil, a China-Afghanistan-Iran rare earth mineral alliance could potentially be even worse to the future of the U.S. economy, not only when it comes to electric cars but things like cellphones, computers and chips. The U.S. is already struggling with a massive chip shortage, pushing automakers to curb production.
President Trump always thought that it was wrong for the U.S. to put in blood, sweat, tears and money into countries without getting paid back someday and in some way by these countries. Trump cut a deal with a now-fallen Afghanistan government to get paid back for its involvement in stabilizing the country. He wanted to rapidly develop Afghanistan rare earth minerals and create that as a revenue source to pay back the United States for saving the country.
Now that Biden has given Afghanistan back to the Taliban, it is unlikely that the United States is going to see any remuneration for all the time talent and treasure we spent on trying to stabilize that country. That is going to go to China now.
Iran has also said it is excited about working with the new Taliban. Iran’s government is using its influence with Taliban leaders to become strategic and economic partners as Iran marches toward its goal of getting a nuclear weapon. Iran in recent days has rebuffed calls from the Biden administration to rejoin the Iranian nuclear talks and instead flaunts its nuclear ambitions by raising its enrichment levels to a level that's going to be just short of having nuclear bomb capabilities. Pakistan is also viewing the victory by the Taliban as a win, but our ally India is feeling more threatened because of a potential Pakistani-Taliban alliance. Pakistan, of course, was the place where Usama bin Laden hid out.
The Biden administration's disastrous retreat from Afghanistan is not only a blow to the people of Afghanistan but also to the people of the world. It is also a blow to Biden’s energy plans as a China-Afghanistan alliance will have a monopoly on the world's all-important rare earth minerals.
Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at email@example.com.