Highlights

• Kazakhstan offers abundant reserves of critical minerals like lithium, nickel, and rare earth elements crucial for green energy transition.
• The EU must quickly invest in Kazakhstan's mineral production to compete with the US and China in strategic resource markets.
• Kazakhstan's metallurgical facilities produce key metals, including beryllium, scandium, and tungsten, and are targeting battery materials and permanent magnet production.

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According to a piece in EURACTIV (opens in a new tab), the European Union (EU) must invest swiftly in Kazakhstan's rare earth and critical mineral production to secure its supply chains for the green energy transition and reduce dependence on China's dominance in this sector.

Going by the logic, Kazakhstan's abundant reserves of critical minerals like lithium, nickel, and rare earth elements position it as a pivotal player in the global energy transition and electric vehicle markets. Xhoi Zajmi writes that to ensure a mutually beneficial partnership, the EU must align its green energy policies with Kazakhstan's local economic needs, fostering industrial development and value-added production in Kazakhstan while accelerating the shift away from fossil fuels. With urgency, Failure to act quickly may result in the EU losing ground to competitors like the United States and China, who are already making inroads in Kazakhstan's resource-rich regions.

What’s the deposit?

Kazakh Prime Minister Oljas Bektenov met with others in government on November 13 November, discussing strategies to strengthen Kazakhstan’s global market position, attract technology and investment, and integrate into new economic sectors (opens in a new tab).

Reports from multiple media and the national government of Kazakhstan that the country boasts world-class facilities for producing beryllium, scandium, tantalum, and niobium. Metallurgical plants produce and process critical metals like bismuth, antimony, selenium, gallium, and indium.

At the Boguty deposit, with $350 million in investment, the government has supported an effort to mine and tungsten concentrate. Planning now includes other important outputs such as tungsten ores, producing ammonium paratungstate, and creating a magnet production cluster.

Manganese sulfate monohydrate production covers five percent of the global market. Meanwhile, value-added targets are on the collective Kazakh mind as the country intends to focus on battery materials, permanent magnets, and heat-resistant alloys.

What biases underpin this article?

The article is labeled as "underwritten," which means it may be influenced by specific stakeholders, potentially leading to biased representations of the urgency or importance of EU-Kazakhstan partnerships. This could skew the analysis to favor investment in Kazakhstan over other strategic options.

Rare Earth Exchanges delves into these topics further. First, a bias involving the framing in favor of EU action is apparent.  The narrative emphasizes EU responsibility and urgency, portraying Kazakhstan as a ready and ideal partner. The risks or challenges of operating in Kazakhstan, such as political stability, legal frameworks, or competition with other countries, are downplayed.

Also downplayed are any adverse environmental or societal impacts.

While advocating for green energy investments, the article does not explore the environmental and social challenges and costs associated with mining and processing rare earth elements, such as local ecological degradation or community displacement.

Finally, the framing of this piece positions China as the default competition. Given the near-monopoly position of China (about 80%+ of rare earth processing), does this reality exaggerate the urgency of action, given that the EU might have alternative strategies for diversifying its supply chains without over-reliance on Kazakhstan?

Some key assumptions the European authors make in this piece are noteworthy, particularly when considering rare earth mineral investment.

• Kazakhstan's Capacity for Rapid Development:
  

  The report assumes Kazakhstan has the infrastructure, governance, and technological readiness to scale up production quickly and deliver reliable supplies to the EU. This is a big assumption.

• EU's Willingness and Ability to Act Quickly:
  

  It presumes that the EU can overcome internal bureaucratic and geopolitical challenges to invest decisively in Kazakhstan, which may not align with past behavior. 

• Long-Term Market Stability:
  

  The article assumes sustained demand and stable pricing for critical minerals like lithium, nickel, and rare earth elements, which are subject to market volatility.  Read Rare Earth Exchanges and consider alternative scenarios that could be possible.

• Alignment of Interests:
  

  The report assumes that Kazakhstan's and the EU's goals will align seamlessly, overlooking potential conflicts, such as differing priorities on local economic development versus export-driven growth.

• US and China as Active Threats:
  

  It presumes that the United States and China will continue aggressive moves in Kazakhstan's resource markets, potentially overestimating their direct competition with the EU in this specific context.

Of course, we cannot ignore China’s strong position in the rare earth markets, a situation that the government there has spent decades to ensure.  Where were Western governments?  Asleep at the wheel?  Well, not as for the most part as they followed a global economics and trade paradigm that worked well for decades.

While the article presents a compelling case for EU investment in Kazakhstan’s critical mineral sector, its bias toward action and optimistic assumptions warrants a more nuanced consideration of geopolitical, environmental, and practical challenges.

Note the owner of EURACTIV is Mediahuis, a European multinational newspaper and magazine publishing, distribution, printing, television, radio and online media company founded in 2014 with assets in Belgium, the Netherlands, Ireland, Luxembourg and Germany.