Tibet's Natural Resources: Tension Over Treasure

Exactly sixty years ago, on October 7 1950, the ‘volunteer’ army of the newly founded People’s Republic of China swept into mTibet 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.

The World Today Published 1 October 2010 Updated 17 March 2020 3 minute READ

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 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 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 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 nwith 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.