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EU Courts Kazakhstan and Uzbekistan for Critical Raw Materials

  • Kazakhstan and Uzbekistan are ramping up investments in rare earth production and plan to cooperate with the EU and US.
  • China's share of rare earth exports has declined from 90% to 70% in the past decade.
  • Australia and the US are expanding their critical minerals supply and refining capacity to reduce dependence on China.
Mining

Via Metal Miner

Ramped-up offshore exploration for rare earth metals and minerals, vital components in sought-after products like hybrid vehicles and smartphone screens, continues to cut into China’s long-held position as the primary global supplier. Countries like Australia, the United States, Myanmar, and even nations like Malaysia, Vietnam, Uzbekistan, and Kazakhstan continue to increase their extraction efforts. This directly translates into a reduced global dependence on rare earth minerals from China.

Kazakhstan and Uzbekistan Look to Grow Rare Earth Operations

Kazakhstan recently announced it will step up investments in the production of rare earth metals. Under its new “Comprehensive Plan for the Development of the Rare and Rare Earths Metals Industry for 2024-2028,” the country aims to increase investment by 40%, significantly improving production value.

Kazakh Minister of Industry and Construction Kanat Sharlapayev announced the additional investment in rare earth production at an April 29 meeting in the Kazakh Parliament’s lower house. In fact, rare earth mineral production already plays a significant role in Kazakhstan’s foreign and economic policies, as the country hopes to cooperate with both the U.S. and EU on this front.

Kazakhstan’s neighbor Uzbekistan seems to have similar ideas. That country recently launched a slew of rare earth mining projects as well. These projects, worth approximately U.S. $500 million, will likely add more critical raw materials like tellurium, molybdenum, and graphite to the supply chain.

Both Kazakhstan and Uzbekistan Hope to Court EU

Like Kazakhstan, Uzbekistan wants to use rare earths to enhance its relationship with the EU. Recently, it inked a Memorandum of Understanding with the European Union aimed at guaranteeing a varied and sustainable supply of critical raw materials to support the global shift towards green energy.

Kazakhstan and Uzbekistan sit on large stockpiles of rare earth elements, which are crucial for industrial use and the development of digital technologies and clean energy solutions. Kazakhstan, for its part, has about 15 rare earth mineral deposits. On the other hand, some experts claim that Uzbekistan sits on the second-largest reserves of CRMs in the region. If true, that country’s decision to invest in CRM development is very wise. In fact, many analysts claim it will not only help Uzbekistan’s own economic growth, but also provide stiff competition to China.

According to European Commission Executive Vice-President Valdis Dombrovsis, the new Memorandum of Understanding with Uzbekistan will help the EU get its hands on critical raw materials. The agreement, he said, was part of EU’s global effort to secure partners for the supply of rare earth metals. Read the 5 best practices of sourcing metals, including rare earth metals.

Where is China in All This?

China has long since established highly restricted rare earth mining and supply chains, resulting in a near-complete monopolization of production. Currently, China controls over 80% of rare earth element processing, much of which continues to be conducted within its borders. Beijing likely hopes to leverage this advantage in international relations, aiming to assert dominance in the global economy’s evolving new energy and economic landscape.

As reported by the South China Morning Post, an increase in offshore exploration for rare earths by other nations may soon begin to erode China’s position as the world’s primary rare earth mineral supplier. The report stated that incoming data showed a slowing down of rare earths exports from China to other parts of the world starting in 2020. According to a report by the U.S. Geological Survey, China’s share of total RE exports dropped from about 90% a decade ago to approximately 70% in 2022. Other countries, including Australia, have since filled up this supply chain gap.

Australia in the Rare Earth Metals Supply Game

According to a report in the Financial Times, Australian mining billionaire Gina Rinehart recently upped her total shares in Australian rare earth developer Lynas to about 6%. Within about a week, Rinehart’s Hancock Prospecting purchased shares in Lynas as well as a 5% in U.S.-listed MP Materials. The two companies are some of the largest non-Chinese rare earth mineral developers. Meanwhile, both Australia and the U.S. have already announced their intention to expand critical minerals supply and refining capacity in order to reduce dependence on China.

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By Sohrab Darabshaw

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