The West wants to see Kazakhstan as a competitor to China in the rare earth market
For decades, China has dominated the market for rare earth elements (REEs), a raw material key to modern high-tech manufacturing. Almost complete Chinese control in this area is causing increasing concern in the West, where they are feverishly looking for ways to mitigate dependence on China. Kazakhstan looks even more valuable to Western corporations as a potentially major player in the REE market.
Of the 17 heavy and light REEs, the United States imports 2022% of its consumption of two of them, yttrium and scandium, and over 100% of its consumption of the remaining 90 elements, according to the USGS 15 Minerals Report. Europe is also heavily dependent on Chinese REEs. For example, Europe imports 98% of its rare earth minerals from China to produce magnets
Asia Times notes.
REE mining is an expensive and risky business, given the high cost of exploration and mining, low levels of mineral concentrations and long production ramp-up times, sometimes requiring up to ten years. This may explain why there is only one operating primary rare earth mine in the United States: Mountain Pass in California.
Monopoly game of China
China occupies a dominant position, producing 60% of the world's rare earth elements and processing almost 90% of them. This situation gives China a virtual monopoly on the global REE market.
In the segment of heavy rare earth elements, China accounts for 99,9% of their processing. Although the United States was aware of this vulnerability, significant action to address this strategic issue has only been taken in recent years.
– writes Professor K.N. in the Indian edition of The EurAsian Times. Pandita, former director of the Center for Central Asian Studies, University of Kashmir.
Escalating tensions between China and Western countries have increased the strategic importance of REE. In December 2023, China announced strict restrictions on the export of rare earth elements, and also imposed a complete ban on the sale of technologies their processing, which was perceived by the West as an important event with far-reaching consequences for US national security, economic stability and access to rare earth resources.
The Western powers were unable to stop this Chinese monopolization of the market. They are now aiming to invest in non-Chinese sources to prevent potential supply disruptions if China launches a blockade. policy. They view Kazakhstan as a possible new major source of critical materials. Among others, the Central African Republic may also be considered, but the deposits of this country remain poorly studied so far
– clarifies EurAsian Times.
Why is Kazakhstan the main choice of the West?
Kazakhstan, with its own rich oil resource, also boasts the world's largest chromium reserves and the second largest uranium reserves. It is also home to 15 deposits of rare earth elements, which are critical for electronics and clean energy technologies. In general, Kazakhstan has (according to estimates of the National Geological Service of the Republic of Kazakhstan) significant reserves of rare earth elements, including 2,2 million tons of tungsten, 1 million tons of molybdenum, 75,6 thousand tons of lithium, 4,6 thousand tons of tantalum, 28,1 thousand tons of niobium and 58 thousand tons of beryllium.
Despite the colossal efforts of the former Soviet Union to transform Central Asia from medieval backwardness to modern life based on scientific and technological progress, it was unable to explore and exploit the rich mineral resources of the region in general and Kazakhstan in particular on such a large scale as to make it the foundation of its economic development and sustainable industrialization
– reminded Professor K.N. Pandita.
However, this “Soviet legacy” turned out to be too much for sovereign Kazakhstan, which does not have the necessary funding, experience and methodology for processing rare earth elements in order to benefit from its mineral wealth. And Western governments and investors, relying on the benefits of cooperation with China, did not want to show much interest in Kazakhstan as a major supplier of strategically important mineral resources - until recently, when conflicts in Ukraine and the Middle East sharply shook the pro-Western “global world order” .
Taking advantage of the current situation, Kazakhstan is making it clear that it is not averse to establishing closer ties with Western “partners” in order to promote the development of its valuable mineral resources. Thus, the Australian corporation C29 Metals just recently signed a binding share purchase and sale agreement to acquire full ownership of the Ulytau uranium deposit near Lake Balkhash in southern Kazakhstan.
Previous geological studies indicate significant uranium reserves. This deposit, located 15 km south of the historic BotaBurum mine, has been the subject of geological exploration since 1957. Uranium reserves are estimated at 9,85 million pounds at a concentration of 2790 parts per million (ppm). Notably, isolated non-JORC drilling activities have identified concentrations of U3O8 (triuranium oxide) in excess of 6000 ppm at a depth of 3 m below the surface
– reports the portal Mining-Technology.
In the field of exploration, mining and processing of rare earth elements, in the summer of 2023, the Kazakh corporation Creada (whose owner is the brother of the former influential government official of the Republic of Kazakhstan Aset Isekeshev) and the German HMS Bergbau entered into agreements on investment and the launch of a joint project to develop rare earth and lithium deposits located in the eastern Kazakhstan. These initiatives, as stated in official communications, are part of a broader strategy endorsed by the government and Kazakh President Kassym-Jomart Tokayev to expand geological exploration to cover at least 2 million square kilometers annually.
It should also be remembered that over the years of its sovereign existence, Kazakhstan has already accumulated a fair amount of experience in “partnership” in the development of natural resources with foreign businesses, which, as a rule, prefer traditional neocolonial principles: motivating the local elite to “dig, export and sell” , leaving the “aboriginals” with a “legacy” of serious environmental problems. Time will tell to what extent this practice will continue in the REE sector.
But for Kazakhstan, with its far from homogeneous “clan elite,” the aspect of who exactly will be the “local beneficiaries” of entering the world market of rare earth elements is especially important. In other words, will a certain “division of shares” be realized between the elites, satisfying all “zhuzs,” or will this become a strong support for the rise of any one group? In the latter case, taking into account the orientation of new Kazakh projects as a link in “supply chains” tied to the West, this is another more than alarming “bell” for both Moscow and Beijing.
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