Blood money recycling and the new cold war

How minerals, mercenaries fuel a never-ending conflict 

Welcome to a special edition of Contention. This should take just about five minutes to read. Please take a moment to share with anybody you know that might like this analysis too!


As the United States announced plans to withdraw 3,500 troops from Afghanistan by Sept. 11, 2021, formally ending the 20-year-long war, foreign policy “experts” put forward a familiar narrative: the war is ending, and ending it is too risky.

But the closure is just a formality, as the war will informally continue under a different structure. The U.S. will “maintain counterterrorism capabilities” in Afghanistan, according to the Pentagon. These “capabilities” include Special Operations Forces, military contractors, and intelligence operatives, the New York Times noted.

Much less familiar in mainstream discourse: Afghanistan’s $1 trillion in mineral resources, a treasure the United States and its allies are loathe to surrender. Keeping control has become a major industry for the companies making billions off war in the region. 

Afghanistan has gold, silver, platinum and iron. There are huge veins of unexploited lithium, an all-important resource for laptop computers and electric vehicle batteries. There are gemstones such as emeralds and rubies that make their way to jewelry shops all over the world. There are converted rare-earth elements such as cerium, lanthanum and neodymium -- critical to next-generation engines, phones and advanced military technology such as sensors and missile guidance systems.

Afghanistan’s government is also handing out contracts to foreign companies with the capital and know-how to exploit these resources. Kabul signed a five-year lithium and rare-earth deal in September giving Australian mining giant Fortescue an “exclusive right” to study and explore -- and exploit -- resources in nine provinces. 

The day before the deal, Afghan First Vice President Amrullah Saleh narrowly survived a bomb attack on his convoy on the way to Kabul, and arrived at the meeting with Fortescue chairman Andrew Forrest with his left hand in bandages.

To keep these mines in operation will require security, and “private military contractor” mercenaries -- which have historically outnumbered uniformed troops in Afghanistan -- will follow. There are currently 16,832 contractors in the country according to the U.S. military’s own statistics, and 1,520 of them are armed mercenaries. This is likely an undercount. More U.S. contractors have died in the war than soldiers.

Unarmed contractors work jobs ranging from logistics to maintaining aircraft, handling construction jobs or training Afghan police and soldiers -- a job traditionally tasked to special operations troops. “The Afghan government relies on these foreign contractors and trainers to function,” John Sopko, the Pentagon’s Special Inspector General for Afghanistan Reconstruction said in March.

The Afghan military wouldn’t exist without U.S. funding, at some $4 billion per year. Since the February 2020 Doha “peace agreement” between Washington and the Taliban, the Afghan government has inked $931 million worth of contracts with private security firms and defense contractors. 

This is a nifty bit of fiscal recycling: the U.S. government funds the Afghan military, which then spends the money with NATO-nation defense contractors. 

American aviation conglomerate Textron, for example, scored a $9.7 million “force protection” deal involving surveillance drones to last until March 2022. British mercenary firm Aegis -- which employed mercenaries filmed firing on civilian vehicles in Iraq in 2005 -- secured two contracts worth $68.2 million to last until 2023 and 2026. Kabul has also inked IT deals with U.S.-based Salient Federal Services, and the United Arab Emirates’ Group 42 to handle security and aviation systems at airports.

This cash grab has the same underlying rationale as almost all U.S. military aggression right now: the burgeoning cold war with China. The United States has a huge strategic problem in this conflict, as China is its top supplier of rare earth elements (REEs), accounting for 80% of U.S. rare earth imports. The demand for the minerals will increase with shifts to electric vehicles and renewable sources of electricity such as wind and solar. Modern military equipment is also useless without these elements. 

“With a major ally like the U.S., which is in dire need for REEs, and Afghanistan, with lavish resources, turning the security partnership into a major strategic and economic partnership is a huge opportunity,” wrote Ahmad Shah Katawazai, Afghanistan’s defense attache in Washington D.C. and a former program officer for mercenary firm DynCorp.

And so the recycling runs even deeper: the United States funds the Afghan military which buys military equipment and mercenary services from Western companies, while also paying off warlords and drug lords that create the conditions necessary for a privatized permanent occupation. 

The dependency and instability means that the United States and allies get first dibs on Afghanistan’s trillion-dollar assets. Those then will sustain an even larger low-grade conflict with China, also to the benefit of the war profiteers. 

This is how 20 years of war have turned Afghanistan into a cash cow for the worst people in the world. Those people in turn have a bipartisan monopoly over U.S. policy in the country voiced by the very “experts” that keep calling for more and more violence. Biden’s “withdrawal” dovetails perfectly with their interests despite the obvious harms to the most neglected stakeholders of all: the people of Afghanistan. 


Our only investment advice: Find someplace safe.

Contact us with any feedback, questions, or stories we might have missed.