Afghanistan, China, and the lithium angle

The US left Afghanistan in August 2021, a backward but resource-rich country. There's one specific metal that is of key importance: lithium. Lithium is used is all cell phones, most communication devices, and has geopolitical weight. Here's the lithium angle in Afghanistan👇👇👇

The problem with renewables. The world wants to transition to renewable energy, but they tend to be seasonal - think of a long winter, or a week without strong wind. Therefore, energy storage becomes as important as energy generation.

The need for batteries. Batteries are needed to store surplus energy that can be used in downtime. Lithium, the lightest of all metals, is needed to build efficient batteries. Its energy density is higher and it charges up remarkably quickly.

Afghanistan lithium reserves. A 10 year old Pentagon memo predicted Afghanistan might become the "Saudi Arabia of lithium." Afghanistan has among the largest known lithium deposits in the world.

The US role. In the 20 year long occupation, the US forces carried out geological surveys and mapped out lithium mines. They also built the roads and infrastructure that will facilitate future mining and the transport of mined metals.

The criticism. US politicians like Marjorie Taylor Greene have criticized president Biden for not getting mining rights to the rare metal mines, including lithium reserves. The US forces found the deposits and built the infrastructure around it - now China might reap the benefit.

China's battery dominance. China makes 73% of all lithium ion batteries produced in the world, but has no lithium mines. The Taliban has said China is their biggest ally. It's likely China will get preferential access to Afghanistan's lithium reserves.

Green new deal and associated legislation will subsidize the production and use of electric vehicles in the US. The demand for EVs will translate into a demand for lithium batteries, which will be fulfilled by the US' biggest geopolitical adversary China.

Bottom line. The consequences of the US exit from Afghanistan will play out for a long time. How it affects the energy infrastructure of the world, how China swoops in and takes advantage of the situation, and how Afghanistan develops in the next decade are all open questions.