Taliban, Chinese Firm to Sign Deal to Extract Oil from Afghanistan

Edited By: Shankhyaneel Sarkar

Last Updated: January 06, 2023, 16:58 IST

A boy sells petrol in a street in Kabul in this 2009 file photo (Image: Reuters)

This is the first energy extraction agreement that a foreign country has signed with the Taliban regime after it wrested power in 2021

Chinese firm Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) and the Taliban government in Afghanistan will sign a contract to drill oil from the country’s Amu Darya basin, news agency BBC reported.

This is the first energy extraction agreement the Taliban will enter with a foreign firm since it took control of Afghanistan in August 2021.

While most world leaders have chosen to keep themselves away from the Taliban due to their treatment of women, minorities and Afghan citizens, the Chinese government has ignored these incidents and has chosen to make economic engagement with the terrorist group.

The deal has been signed for 25 years and will run till 2028.

The Taliban also showed its loyalty to the Chinese government by protecting its business interests and killing eight Islamic State Khorasan (ISKP) militants who attacked a hotel where Chinese businessmen were staying and arrested several others.

An attack on Kabul’s Longan Hotel led to the death of three people and injured 18, which included five Chinese citizens.

“The Amu Darya oil contract is an important project between China and Afghanistan,” China’s ambassador to Afghanistan Wang Yu was quoted as saying by news agency BBC. He was addressing a press conference in Kabul.

Another Chinese state-owned company is discussing taking control of a copper mine in east Afghanistan, the BBC said in its report.

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Afghanistan is crucial for China since it is sitting on vast reserves of natural resources like natural gas, copper and rare earths, which is more than $1 trillion.

Decades of turmoil meant that those reserves are still untapped.

China’s interest in the region is also due to the Belt and Road Initiative (BRI), since Afghanistan is central to the initiative. Beijing has not recognised Afghanistan’s Taliban regime but continues to pursue its business interests in the war torn country.

Mining in Mes Aynak, which lies in the south-east of Kabul, one of the world’s biggest copper deposits, was discussed between Chinese and Taliban officials earlier in March 2022.

China needs Afghanistan’s lithium and copper mines to dominate the supply chains of components needed to make electric vehicle batteries and smartphones.

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