Sunday, December 16, 2007

Afghanistan's Newest Benefactor - China

No, they're not going to help NATO fight the Taliban or al-Qaeda. Instead the Chinese will be helping themselves to one of the largest copper deposits in the world. It's the Aynak copper mine in Logar province and the Chinese beat out rivals from Canada, the US and Russia to get it.

China Metallurgical Group has committed $4-billion to the project which will also see a direct rail line constructed linking Afghanistan and China. I wonder if the Chinese project will be using electricity generated by the Kajaki dam NATO has been struggling to defend against the Taliban? Maybe NATO will even wind up providing security for China's investment.

It's believed that part of the investment is a desire, on China's part, to "push back" against India and the Indian/US efforts to contain China. Now it's seen in some quarters that it's China working to encircle India. This is the take of M K Bhadrakumar, a career diplomat in the Indian Foreign Service for over 29 years, published in Asia Times Online:

"...the mother of all Chinese encirclement of India still remains largely unnoticed in Delhi - the Beijing-Tehran axis. There is wide recognition that if the United States hasn't been able to push through another tougher United Nations Security Council resolution against Iran over its nuclear program, that has been largely because of China's reluctance to concur.

But what happened last Sunday still came as a bolt from the blue. China Petroleum Corporation, better known as the Sinopec Group, signed a contract with the Iranian Oil Ministry for the development of the Yadavaran oil and gas fields in southwestern Iran.

The current estimation is that the project cost will be $2 billion. Under the contract, China will make the entire investment necessary to develop the fields. The first phase is to produce 85,000 barrels of oil per day and the second phase will add another 100,000 barrels. According to Iranian estimates, Yadavaran has in place oil reserves of 18.3 billion barrels and gas reserves amounting to 12.5 trillion cubic feet.

China outmaneuvered both the US and India on Iran. When the American National Intelligence Estimates collapsed Bush's claims of Iran's imminent nuclear threat to the world, China was ready to move - and quickly. India, meanwhile, found itself shut out, having succumbed to US pressure to sanctions against Iran.

Indian diplomacy has a lot of catching up to do. In the short term, Delhi will have to pay a price for overlooking the geopolitical reality that Iran is the only really viable regional power in the Middle East and the Persian Gulf. Delhi's best hope is that true to their innate pragmatism, Iranians will let bygones be bygones.

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