While the news outlets bemoan a large Lithium deposit going to the Taliban, they ignore just how much trouble it will be.
By Rob McCammon
Follow me on Twitter @RobMcCammon1
For nearly 20 years we have been embroiled in Afghanistan. I have a folded flag that my nephew presented me last year from his tour there. Now, whatever or however you may feel about it, we are leaving there. Due to any number of things that I am trying my best not to speak about here, the Taliban has taken over. As the planes have visibly left and turmoil of problems now created, stories about untold amounts of Lithium riches are there for the taking.
My quick thought on this story was four simple words 'let them have it'. But... I am committed to trying to do better than that.
To me it's about OpEx spending. That is Operational Expenditures. Quite simply, how much does it cost to make your product? In the US, that is trucks, train cars, wages, equipment, etc. In Afghanistan, that will include protection, security, complex negotiations to get this from the remote parts of central Asia to China for processing. Imagine having to pay to have one of those Black Hawk helicopters we left circle your site. How much will that be? What about the wages of workers there? Will you pay a 3x premium? 4x?
Even if it is the Taliban running a mining operation, they will need to do a deal with a devil of sorts, the Chinese. The problems with Muslims in Western China will mean they are dealing with a group that they have a well known beef with.
A little side note here. This resource has been there and known for a while. Why hasn't one of the big 3 gone after it? Probably the same reason I am saying here. In Western Australia mining is already is going on. The Lithium Triangle has established logistics and production. The US is developing production with the only challenge of courts; Afghanistan will need cash and maybe hard to negotiate with. If this was going to be developed, my thoughts is that there would have been an effort to do that.
In the end the worst thing a business deals with is uncertainty because uncertainty costs money. Afghanistan is definitely uncertain.
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