Questions have been raised over the future of a planned copper mine in Afghanistan after the businessman who won the deal in 2007 was expelled from the Communist Party for corruption.
Shen Heting, the former general manager of the China Metallurgical Group Corp (MCC), a state-owned company, signed the deal ten years ago for China to develop the mine. However, no progress has been made on it to date.
According to a South China Morning Post article, the deal was deadlocked for a number of reasons including China’s concern over insecurity, Afghanistan’s apparent refusal to renegotiate the contract in line with obtaining some mining materials in the country and the outcry over plans to destroy the area, Mes Aynak, which is an ancient Buddhist city.
However, the South China Morning Post reported that the stalled project, which is just outside Kabul, is a reminder of possible risks for Chinese investment abroad.
“What is happening with the Chinese investment in Afghanistan shows that the future of some of China’s ‘One Belt, One Road’ projects is not a straight path,” Wang Lian, a professor at the Department of International Politics at Peking University, was quoted as saying.
“Countries with internal security problems like Afghanistan are likely to lag behind more on cooperation with China than some others,” Wang said.
In 2007, Shen’s MCC and another state-owned company, Jiangxi Copper, won the rights for 30 years to extract, smelt and process raw copper at Mes Aynak, for a price of $3 billion USD. At the time it was the largest-ever foreign investment deal in Afghanistan.
But according to the South China Morning Post report, the deal Shen sealed a decade ago continues to test China’s capabilities in managing complex projects beyond its borders.
Last September, China announced the completion of a cargo train service infrastructure that linked with northern Afghanistan. However, Afghan business news portal Wadsam reported on early last month that no train has run on the line since it was completed six months ago.
“It is more of a symbol for China to show that it is still eager to include Afghanistan in its One Belt One Road project,” Wang said.