The global electrification drive, spearheaded by the burgeoning electric vehicle (EV) industry, has intensified the race to secure lithium, a vital component in EV batteries. This has thrust Afghanistan, boasting some of the world’s largest untapped lithium reserves, onto the center stage. Often referred to as the “Saudi Arabia of Lithium,” Afghanistan’s estimated lithium reserves are pegged at around 2.3 million tons, making it a highly coveted prospect for countries vying for dominance in the clean energy sector.

China which commands a substantial 56.3% share of the global EV marker and a leading consumer of lithium, has emerged as a key stakeholder in Afghanistan’s lithium resources. It’s interest in Afghanistan’s lithium stems from a multi-pronged strategic approach:

• Securing Lithium Supply: A Lifeline for China’s EV Dominance: China faces an ever-growing demand for lithium to fuel its burgeoning domestic EV industry. As of 2023, China accounts for over 50% of global EV sales, and this dominance is expected to continue. By securing access to Afghan lithium, China aims to lessen its dependence on other sources, primarily South American countries and Australia and mitigate potential supply disruptions. This would fortify its position in the EV market and shield it from price fluctuations or political instability in other resource-rich regions. China’s vulnerability to supply chain disruptions was highlighted in 2021 when a political spat with Australia, a major lithium producer, led to a surge in lithium prices. Diversifying its sources of lithium is crucial for China’s long-term EV ambitions.

• Economic Windfall: Lithium’s Lucrative Potential: Lithium extraction and processing present lucrative economic opportunities. China’s investments in Afghan lithium mines could generate significant revenue and open new markets for Chinese companies involved in mining equipment, infrastructure development, and logistics. This would bolster China’s economic clout and technological prowess in the lithium sector. Chinese companies have already made inroads into Afghanistan’s mining sector, with Jiangxi Hongda Lithium Co., a state-owned enterprise, expressing interest in Afghan lithium projects.........

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