Dealmaker-in-chief Donald Trump is reportedly mulling a proposal to exploit Afghanistan’s $1 trillion in mineral deposits to boost the U.S. high-tech manufacturing industry and counter China’s dominance of rare earth elements (REE) despite the fact the entire endeavor lacks a sound economic basis and will likely destabilize the country even further. Cynics have dared to suggest that the White House is looking at the Afghan resource imperialism plan as a way for Trump to justify his decision to escalate the war. Then again, that would at least make sense.
The venture is part of a larger strategy to privatize the war pitched by Erik Prince - founder of the security contractor formerly known as Blackwater. The details of the plan, leaked and published by BuzzFeed last week, seem to support a strategy that he earlier described as being based on the British East India Company model, as if to make the neocolonial imagery even more vivid.
The mercenary extraordinaire hopes the White House will appoint him as Viceroy to oversee an army of private contractors to support Afghan forces in their fight against the Taliban, al-Qaeda and ISIS - a plan he claims is bottom-line focused and will save U.S. taxpayer dollars.
The proposal calls for a “strategic mineral resource extraction funded effort” targeting uranium, phosphate and rare earths deposits supposedly worth a fortune in Helmand and Nangarhar provinces. It would be a huge win for the United States, Prince argues, considering China has cornered the market on more than 90 percent of the world’s rare earths.
“While other countries are aiming at boosting REE production… China currently holds the dominant market position, a threat to U.S. manufacturing capability in electronics and unique defense products,” Prince’s proposal says.
The Afghan government is partly responsible, however, considering President Ashraf Ghani encouraged Trump to pursue the mineral madness during a meeting in September. Yet, ironically, Afghanistan’s own mine ministry does not seem as upbeat about prospects as the presidential palace.
Afghan Ministry of Mines and Petroleum spokesperson, Abdul Qadeer Mutfi, told The Globe Post that there is “little to no information on the proven economic viability of these resources.” He said it was impossible to speculate how much it will cost to extract the materials without more geological, technical and economic analyses.
But based on order-of-magnitude estimates of extraction costs, Afghanistan’s mineral deposits are likely worth approximately zero, as Adam Smith Institute Fellow Tim Worstall explains in a Forbes piece.
“The value of a mineral deposit is not the value of the metal once it has been extracted. It’s the value of the metal extracted minus the costs of doing the extraction,” Worstall said. “And as a good enough rough guess the costs of extracting those minerals in Afghanistan will be higher than the value of the metals once extracted. That is, the deposits have no economic value.”
Actually extracting the minerals is another problem considering the perils of mining in a war zone evidenced by China’s inability to extract copper from Afghansitan’s Mes Aynak mines for the past ten or so years. Not to mention the logistics nightmare and the fact geopolitical realities may thwart the project. The only viable route to ship the resources from Afghanistan runs through Pakistan, a country in the crosshairs of Trump’s South Asia strategy because of Islamabad’s failure to root out Afghan Taliban and affiliates like the Haqqani Network.
Consider, however, that Pakistan is in bed with China – the very country the United States is trying to counter. Hence, there is no feasible way to get the minerals to market even if you were able to extract them cost-effectively.
The pursuit of minerals is probably not even in Afghanistan’s best interests, regardless of what Ghani is selling, because of the proverbial resource curse. Earlier this year, the U.S. Institute of Peace concluded in a report that industrial-scale looting of mineral resources has fueled the insurgency by providing funds for both the Taliban and ISIS while “generating negligible taxes and royalties for the Afghan government.”
To his credit, Prince has proven to be consistently motivated by the bottom line - his company’s bottom line, that is. For instance, he was a big fan of Beijing before he proposed to launch this resource war under Trump. In 2014 he told the Wall Street Journal he would rather partner with China on projects in Africa than deal with Washington.
“[China] has the appetite to take frontier risk, that expeditionary risk of going to those less-certain, less-normal markets and figuring out how to make it happen,” Prince said.
Even Adam Smith, the father of modern capitalism, railed against Prince’s British East India Company model. Smith denounced the Company as a useless, burdensome bloodstained monopoly responsible for grotesque massacres of colonized peoples. It remains to be seen, however, if these inconvenient details will get in the way of a grand bargain between Prince and a White House in search of a more politically palatable pretext for open-ended war.