Taliban sitting on $1T worth of minerals, metals in Afghanistan
FOX Business’ Jackie DeAngelis reports on the economic implications of the Taliban sitting on about $1 trillion worth of metals and minerals in Afghanistan, which includes lithium, a metal in high demand as it’s used to make chips.
Economic implications of the Taliban takeover of Afghanistan are in focus as the country is home to a crucial, untapped treasure-trove of minerals and metals, including lithium, which is in high demand as it is used to make semiconductor chips.
Afghanistan contains about $1 trillion worth of valuable metals and minerals, the Associated Press reported, citing a 2010 U.S. government report. Mineral resources have been considered potentially transformative for the country.
Lithium is an important global commodity used in mobile phones, computer batteries and other devices, which has experienced explosive growth in demand in recent years.
Adding to increased demand include recent telework opportunities during the COVID-19 pandemic, which caused a rise in some consumer electronics purchases, typically containing semiconductor chips.
FOX Business’ Jackie DeAngelis reported on "Varney & Co." on Tuesday that the Taliban sitting on lithium, the metal that is considered essential to modern life, could have a "huge impact" on the global chip shortage.
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"The Taliban is talking with China… and that means the chip shortage may not be resolved so quickly because China is in the driver’s seat when it comes to these raw materials," DeAngelis told host Stuart Varney.
The semiconductor chip shortage has been impacting companies around the globe as some regulations implemented during the pandemic, including shutdowns at manufacturing facilities, had caused limited supply amid increasing demand.
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The shortage affected the auto sector heavily throughout this year. General Motors recently announced that it would reduce some truck production in North America due to the global chip shortage, while Ford has also pulled back production at several factories.
There are expectations that other tech sectors could soon feel similar effects.
DeAngelis noted on Tuesday that "lithium is crucial because it’s not just used in chips, it’s also used in technologies for clean energy," which includes rechargeable batteries.
"People are talking about 40 times an increase in demand in lithium in the next 20, 25 years," Wealth Minerals CEO Henk Van Alphen said.
Before the pandemic started, the world’s top lithium producers were Australia, which accounted for 52.9% of global production in 2019, followed by Chile at 21.5% and China with 9.7%, according to bp Statistical Review of World Energy.
DeAngelis reported that Van Alphen suggested Chile would be a good region for the U.S. to export more lithium from given that country doesn’t necessarily have an agenda.
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She noted that while China doesn’t currently have the most lithium, it "mines the most" because of its focus on manufacturing semiconductors and batteries.
Lithium Carbonate has risen 144% over the last year to $14,250 per metric ton, according to Benchmark Mineral Intelligence.
Afghanistan, which is a mountainous, land-locked region, also contains huge, largely untouched reserves of copper, zinc, iron ore, chromite, mercury, gems, including rubies and emeralds, as well as gold and silver.
The war had scared away investors. In addition, many of the mines that do exist in Afghanistan are reportedly controlled by local warlords who reap the profits. The Taliban is believed to have earned millions from illegal mining, the Associated Press reported.
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FOX Business’ Jonathan Garber, Brittany De Lea and The Associated Press contributed to this report.
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