On a recent trip to Mongolia, I found the place filthy with miners. I rarely come into contact with people in the mining industry, but I often read about their exploits, usually in the Wall St. Journal, The New York Times, and The Economist. So much of global politics is about competition for resources that I’ve always thought it was wise to pay attention to the aims and strategies of those tasked with acquiring and processing them. I definitely want to know what a mining executive thinks about political and economic realities, for the same reason I read the business press.
On the flight into Ulaanbaatar, I sat next to a Canadian miner employed by an Australian company, who was in the Gobi helping to set up a copper mine. He told me lots of interesting things about transnational mining companies doing business in the region. It’s mostly Chinese, Russian, Korean and French companies, and selling what’s under the ground is basically the only real business in Mongolia, though they’ll be happy to sell you a cashmere sweater or a variety of felted wool products as well:
On my flight out, I sat next to an American mining executive on his way from gold mining in Mongolia to an oil drilling gig in Kazakhstan. This second executive talked a lot about the backstory of the mining business, about corruption and bribery, and he claimed that “risk averse” U.S. and European mining companies were losing out in the resource wars. He spoke of some sordid realities of the mining business and shared stories about Nigeria, Mexico and… Afghanistan.
Afghanistan? Did the U.S. have mining operations in Afghanistan? Not exactly. But were we in the mining business in Afghanistan? Absolutely, in a manner of speaking.
“Oh yeah,” the mining executive said, leaning in confidingly: “The Chinese just won the largest copper mining bid in the world after bribing a bunch of Afghan officials, but that’s not even the worst part.” He paused for dramatic effect, then continued: “The worst part is that it’s the U.S. providing military protection for the Chinese to do it!”
Interesting. Once I got back, I started looking into U.S-China-Afghanistan relations, and found that this guy was basically speaking the truth:
“China is in the process of sinking $3.5 billion into Afghanistan to exploit one of the last remaining copper reserves on the planet. And how many deaths in Afghanistan for the People’s Liberation Army? Zero. Will China step in to protect the largest single foreign investment in Afghanistan’s history? You bet — but only after fighting the Taliban to the very last American soldier it could muster.
Feel ripped off? On a gut level, you should. “
- “Is Obama’s Afghanistan Strategy Ripping Off America?,” Thomas P.M. Barnett, Esquire magazine, December 2009
Afghanistan. The Soviet Union’s own Vietnam, the alleged base for Al Qaeda, where the U.S. first gave money and training to Osama bin Laden in the name of fighting so-called “communism,” homeland of the Taliban and various warlords, and Obama and the U.S.’s costly, escalating ($940 billion and counting) second war front, where General Stanley A. McChrystal, top U.S. man in Afghanistan, undertook an epic foot-in-mouth routine a while back, in a series of high-profile interviews for Rolling Stone magazine.
Many people who root for U.S. military and business interests can understand the basic problem of a respect and strategy gap between a general and his commander-in-chief. Quite a few people can also understand the dubious logic of a protracted military occupation in a country posing unprecedented logistical challenges at a time when the U.S. is having difficulty meeting its domestic responsibilities.
But how many people know that the 100,000+ U.S. and NATO soldiers in Aghanistan are effectively providing stabilization and armed security forces for Chinese mining interests? And how many people know that while China ratchets up the world’s largest copper mining operation in Afghanistan, they will be committing not a single member of their own military forces to protect their business in the region? A December 2009 New York Times article explained the situation thusly:
Two years ago, the China Metallurgical Group Corporation, a Chinese state-owned conglomerate, bid $3.4 billion — $1 billion more than any of its competitors from Canada, Europe, Russia, the United States and Kazakhstan — for the rights to mine deposits near the village of Aynak. Over the next 25 years, it plans to extract about 11 million tons of copper — an amount equal to one-third of all the known copper reserves in China.
While the United States spends hundreds of billions of dollars fighting the Taliban and Al Qaeda here, China is securing raw material for its voracious economy. The world’s superpower is focused on security. Its fastest rising competitor concentrates on commerce…
S. Frederick Starr, the chairman of the Central Asia-Caucasus Institute, an independent research organization in Washington, said that skeptics might wonder whether Washington and NATO had conducted “an unacknowledged preparatory phase for the Chinese economic penetration of Afghanistan.”
“We do the heavy lifting,” he said. “And they pick the fruit.”
The reality is more complicated than that… [but] the conclusion is inescapable: American troops have helped make Afghanistan safe for Chinese investment. And there is no sense that either government objects to that reality. As diplomats and soldiers alike stress, the war in Afghanistan was never motivated by commercial prospects. Had an American company won Aynak, some Afghans noted wryly, critics inevitably would have accused the United States of waging war to seize the country’s mineral wealth. Moreover, if China succeeds in developing Aynak and generating revenue for the Kabul government, that helps achieve an American goal.
With government money and backing behind them, China’s state-run giants take risks in places that even the largest private behemoths will not tolerate, and they can add sweeteners — from railroads to mosques — that ordinary mining firms are ill equipped to provide.
“The Chinese have sort of raised the bar. They’ve taken it beyond the scope of just an extractive operation,” the Western official said. “The Chinese are willing to step up and take a long-term strategic approach. If it takes 5 or 10 years, at least they have a beachhead.”
China is also gearing up to put this business-friendly set of affairs in Afghanistan to even more profitable use, mining Afghanistan’s recently discovered deposits of lithium. Lithium is used in rechargeable fuel cell technology, and is expected to play a major role in the rapidly growing electric vehicle industry. As one industry publication reports:
Even though we’ve tried to help kill the phrase “the Saudi Arabia of [insert industry here],” we’re going to bring it back one last time. According to an article in the New York Times this weekend, Afghanistan could be the new “Saudi Arabia of lithium,” after analysis from the Pentagon has emerged that suggests that Afghanistan could have lithium deposits as big as those of Bolivia, which currently has the world’s largest.
“China wants to be the leader in the lithium ion battery market, and I’m sure they’re very interested in getting their hands on Afghanistan’s reserves, particularly given how close they are to it,” says Lux Research analyst Jacob Grose. China’s own domestic lithium reserves — which stands at 1,100,000 tons in its reserve base, and delivers about 3,000 usable tons onto the market each year, according to the United States Geological Services’ Mineral Resources Department — are mostly extracted with conventional mining techniques. That means Chinese lithium can be more expensive to mine than lithium found within salt lakes, which can be processed with evaporation, and are found in South America — and now Afghanistan.
As if this was not all cause enough for concern and intense questioning, I also discovered credible reports that U.S. operations in Afghanistan are creating, not reducing, the influence of warlords, and that taxpayer money has been funneled, in some cases directly, to Al Qaeda. A 79-page House of Representatives study entitled “Warlord, Inc.: Extortion and Corruption Along the U.S. Supply Chain in Afghanistan” details how local warlords and Al Qaeda operatives are paid-off, for protection and various other reasons. It details how much of the work for the U.S. supply chain is provided by a company called Host Nation Trucking, whose practices are questioned pointedly in the report. One quote from the report that I’ll share here had me on the verge of tears and laughter at the same time:
Actions speak louder than words, and the locals see these drugged-out thugs [HNT employees] with guns and trucks with “The United States” painted on them shoot without reason… Many of the gunmen have little or no training, and many are also high on heroin or hashish… U.S. Lieutenant Colonel Dave Abrahams said he has tried to tell locals that he understands their plight, but he is consistently undermined by the wild shooting.
Yeah, I could see how the locals might not feel you understand their concerns when the drugged-out goons and warlords you give money to keep shooting them.
Several years ago I wrote an article (“New World Disorder”) about how, in the wake of the attacks of September 11, 2001, the Bush administration had responded by jettisoning arms control regulations and selling a flood of weapons to governments and regimes once considered off-limits because of instability or human rights violations. Nothing says “safety” like “massive arms deals to unstable regimes.” Toward the end of the article, I quoted a line from President Coolidge circa 1925, that “The business of America is business,” and then asked if it wasn’t better said, given observable reality, that “The business of America is the business of war.”
The official line is that the U.S. is in Afghanistan to fight terrorism and reduce the threat of Islamist extremism. But how credible is this claim, when the U.S. is funneling money to the very people it calls the enemy, and while it works hand-in-hand with the Chinese to make Afghanistan safe for business? And how many more people need die before the operation is considered a success?
War is a racket. General Smedley Butler (“The Fighting Quaker”), a decorated pre-World War II military hero who recanted and became an outspoken critic of U.S. military policy, defined a war racket as:
“Something that is not what it seems to the majority of people. Only a small inside group knows what it is about, and it is conducted for the benefit of the very few at the expense of the masses.”
“I wouldn’t go to war again as I have done to protect some lousy investment of the bankers. There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket…
It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country’s most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.”
Addendum: in the latter part of July, 2010, Wikileaks released 90,000 pages of confidential U.S. military documents that served to further underscore that something is indeed rotten in Afghanistan.