China Afghanistan Lithium Connection

1. Are the Chinese Government’s Approval for Taliban Aimed at Supporting Lithium investments in China? Countries have been rallying for or against Taliban since the group took over the Afghanistan territory. Various countries have their own interests at stake with Pakistan supporting Taliban as a neighbouring country and United States withdrawing their military from the region and most of the European countries still not recognizing the group as a legitimate government. In this regard China was one of the very first countries recognizing Taliban administered Afghanistan. Afghanistan is among the countries having the world’s largest Lithium resources. With the investments in Lithium rising in China, and the China’s aims to lead the global energy storage industry, it becomes important to think that whether the Chinese support for Taliban is aimed at supporting the Lithium investments in China. The upcoming investments in China include the SK Innovation’s investment of USD 1.04 billion in a new battery factory with SK Innovation having plans of increasing their battery production capacity to 200 GWh in 2025 which is up 60% from a previously announced expansion of 125 GWh with the current capacity of 40 GWh. Other upcoming investments include South Korea’s POSCO Chemical’s planned capacity addition of 60,000 tonnes per year of battery material, and Hainan Mining’s plan to build 20,000 tonnes per year Lithium Hydroxide plant. As per ChemAnalyst, “the proposed capacity additions in China would require a large supply of Lithium and China would have to source this Lithium in order to achieve its goal of becoming the major producer of battery materials, it is because of this Afghanistan plays an important role in China’s foreign policy regarding its Lithium needs.”