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"Canada can, within a positive friendly atmosphere, ask the Chinese government to resolve the Tibetan situation."

Tibet's Natural Resources: Tension Over Treasure

September 26, 2010

Roger Howard
The World Today
Volume 66, Number 10
October 2010

Exactly sixty years ago, on October 7 1950, the
'volunteer' army of the newly founded People's
Republic of China swept into Tibet and
effectively ended 39-years of relative autonomy.
Over the coming decades the relationship between
Beijing and Lhasa will be defined to an important
degree by the region's superb natural resources.
But as the Chinese authorities prepare to unveil
an important new rail-link and announce ambitious
plans to make Tibet into 'an important strategic
resources reserve base', it seems likely that the
'development' of the region will either
strengthen or dissolve these political ties.

Although china has long regarded Tibet as a
plentiful source of valuable natural resources -
the Chinese name for the area, Xizang, also means
'the place of western treasure', and its vast
forests and coalmines were heavily exploited
after 1950 - the full potential of huge mineral
wealth has only been recognised since the late
1990s, when Chinese geologists undertook extensive surveys.

Tibet -- a vast area of 965,000 square miles that
includes the Tibetan Autonomous Region as well as
parts of Yunnan, Gansu, Qinghai and Sichuan
provinces - is now believed to harbour huge
quantities of some of the world's most highly prized minerals.

A $50 million seven year government survey of the
Tibetan plateau, released in 2007, discovered
considerable deposits, including forty million
tons each of copper, zinc and lead, and more than
one billion tons of high grade iron. The region
also boasts uranium, borax and potash.

In particular, Tibet is thought to have some of
the world's largest reserves of lithium, a vital
ingredient in the batteries that power today's
mobile phones and laptops, which could
conceivably fuel the next generation of road
transport. The 2.4 million tons of lithium
carbonate deposits at Zhabuye, Damxung and
Taijinaier Salt Lakes are among the world's
largest; extraction is only just getting under way.

Tibet's other key natural resource is water; its
mountains are home to ten major watersheds
already being used to create massive hydro-electric projects.

On Track

All these raw materials will continue to fuel
China's economic growth. Beijing has hitherto
been heavily reliant on imported minerals and
metals, putting its industry at the mercy of a
potentially volatile international market that
sometimes commands very high prices. Tibet's
natural resources offer greater self-sufficiency
and some insulation from this volatility.

This was one driving force behind the Western
Development Strategy first announced by President
Jiang Zemin in June 1999. Seeking to 'strengthen
national unity, safeguard social stability and
consolidate border defence', Jiang's plan was for
hugely ambitious infrastructure development and
foreign investment that would open-up Tibet, and
some other regions, to investors.

The inauguration of a new railway, between Lhasa
and Gormud in July 2006 has helped realise
Jiang's plans. Running for 1215 miles at very
high altitudes, the railway was not only a huge
technical achievement but also a commercial
milestone, since it provides a gateway for
merchandise, investors and a migrant workforce.
And a year ago Beijing announced a scheme to
extend it even further, linking Lhasa with
Chengdu, the capital of Sichuan province.

Such markedly improved transport links have
helped attract the commercial investment that
Beijing needs to 'develop' Tibet. Although
national companies, such as Tibet Mineral
Development, provide some of this investment,
Beijing also needs the expertise and financing of
foreign businesses. Several Canadian mining
companies are already involved, chief among them
being Continental Minerals, which has invested
heavily for five years in a huge copper-gold complex southwest of Lhasa.

The Beijing authorities are hoping that, with
such investment, they can make Tibet into what
they termed, at a rare high-level meeting about
the region in January, a 'strategic reserve' of natural resources.

Investment in Tibetan natural resources is still
in its infancy. In March the Chinese state news
agency Xinhua claimed that they contribute just
three percent of the local economy, which remains
dominated by farming and herding, although
tourism is increasingly important. But in coming
decades this figure is likely to increase
dramatically, and the Chinese authorities
anticipate that by 2020 the mineral industry
could contribute as much as half of regional turnover.

Loyalty or Conflict?

The political impact of such resource
exploitation is entirely unpredictable. On the
one hand it is possible that it will strengthen
ties between the people of Tibet and the Beijing
regime. The Chinese authorities have long
calculated that heightened prosperity for
Tibetans will increase their loyalty. The economy
has grown rapidly in recent years, at an annual
rate of around twelve percent, and Beijing now
plans to promote 'leapfrog' economic development in the region.

This will certainly bring strong material
benefits to many ordinary Tibetans. Continental
Minerals, for example, emphasises not just the
jobs its investment has already created, but also
'numerous opportunities for community development
from basic need to livelihood, education and
training programmes'. And the massive
polymetallic mine at Gyama, in Lhasa, which
opened in July, is expected to employ thousands
of local people when it eventually reaches its
projected daily output of around six thousand tons.

But it is also possible that the development of
so many natural resources could prove
counterproductive by accentuating political
tension. Ever since the invasion of 1950, Tibet
has periodically exploded into outright violence,
most recently in the spring of 2008, when
widespread riots led to a very heavy clampdown by Chinese security forces.

This could happen again if future development
brings Han Chinese migrants into the region in
ever greater numbers. The Lhasa-Gormud railway
has already produced a large influx of settlers,
stirring tension with indigenous Tibetans.

There is also likely to be a substantial
environmental price. Large-scale mining, for
example, will necessarily involve the destruction
of traditional farmlands and the uprooting of
settlements: vast numbers of Tibetans, many of
them nomads, have already been relocated into
housing complexes to make way for excavation.

In 2005 Du Ping, director of the Western
Development Office under the State Council,
China's cabinet, said that 700,000 people in
western China had been resettled in the previous
five years because it is 'the most effective way
to restore land to a healthy state'.

Resource Scramble

Large numbers would also have to be relocated if
China attempted its hugely ambitious scheme to
divert around six hundred billion cubic feet of
water from the Yalong, Dada, and Jinsha rivers,
and channel it into the Yellow River in the northwest.

If, in a worst case scenario, economic
development in Tibet does provoke protests or
violence, then it will present some testing
dilemmas for Beijing and the outside world.

For example, the extraction of Tibetan resources
would mean that China would rely less on foreign
sources. At present Beijing encourages its
national enterprises to invest in mineral-rich
countries such as Australia, Brazil, Burma, Chile, Indonesia, and Mongolia.

There is concern about a global scramble for
resources that could send commodity prices
soaring and perhaps inflict unnecessary
environmental damage. But such pressure might be
eased if China turned inwards, relying more on its own domestic sources.

The extraction of Tibet's natural resources will
not only be crucial in shaping the political
relationship between Beijing and Tibet but could
also have powerful global repercussions.

For example, if China exports some of them it
will potentially offer political leverage over
importing countries, sometimes forcing a choice
between political allegiances on the one hand and
economic needs on the other. India's fast growing
economy is hungry for such resources but, these
last sixty years it has offered sanctuary to the
exiled Tibetan leadership, itself a source of
real irritation to Beijing, as it seeks to
develop its vision for that land of treasure.
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