Highlights
- Kazakhstan has promising rare earth element deposits but lacks critical midstream processing and downstream magnet manufacturing capabilities.
- China currently controls 90% of rare earth element refining capacity, creating an urgent need for alternative supply chains.
- Developing a functional rare earth elements supply chain will require substantial Western investment, technology transfer, and long-term strategic planning.
A recent Atlantic Council (opens in a new tab) article (opens in a new tab) by Miras Zhiyenbayev (opens in a new tab) argues that Kazakhstan could anchor a resilient supply chain for rare earth elements (REEs) in the West. While the piece is strategically ambitious and timely, given the current trade war with China, it underplays major bottlenecks in the rare earths value chain and overstates Kazakhstan’s near-term impact.
The article accurately notes that China controls up to 90% of REE refining capacity and continues to weaponize this dominance through export restrictions, now targeting seven heavy and medium rare earths. This is triggering a global supply crisis affecting U.S. defense platforms, automakers, and electronics manufacturers. The West urgently needs alternatives, and Kazakhstan, as the world’s top uranium producer with growing rare earth exploration, appears geopolitically aligned and geologically endowed.
Zhiyenbayev’s case rests on several compelling points: a massive new discovery in Karagandy (potentially 200,000 tons TREO), Soviet-era exploration data, investor-friendly reforms, and multi-vector diplomacy with the West. He also proposes concrete steps, including permanent normal trade relations (PNTR), a U.S.–Kazakh task force, and blended-finance strategies.
A Critical Eye for Retaining Investors
So, what is our concern with this perspective? While Rare Earth Exchanges (REEx) continues to promote industrial policy and alliances, the author's point of view does not capture many essential elements necessary for the U.S. and other Western nations’ REE supply chain resilience.
Starting with a lack of midstream processing capability. Kazakhstan currently exports 100% of its rare earth element (REE) output to China. While the geology is promising, no functional refining or separation infrastructure exists for REEs. The article acknowledges this gap only in passing, despite its central importance. Without midstream investment (e.g., solvent extraction or ion exchange separation), Kazakhstan will remain a source of unrefined ore, not a supply chain anchor.
Next, the nation has no magnet manufacturing capability. The ultimate supply chain need isn’t just raw oxide—it’s finished permanent magnets, which are vital for electric vehicle (EV) motors, turbines, and missiles. Kazakhstan lacks an industrial base in NdFeB or SmCo magnet production, and the article does not suggest when or how such capacity could emerge. This remains an issue that the author should have addressed.
Finally, we are facing long timelines and high risk with this part of the world. Zhiyenbayev concedes that greenfield REE projects take a decade to develop—yet he frames Kazakhstan as a near-term hedge. In reality, Kazakhstan cannot meaningfully offset China’s 2025 export restrictions within this decade unless midstream and downstream assets are co-located rapidly through Western-led project finance, tech transfer, and offtake commitments.
REEx View
Kazakhstan is a credible long-term REE partner—but not a short-term fix. The Atlantic Council’s vision is directionally correct, but lacks realism in its supply chain approach. Any serious Western strategy must include the rapid deployment of processing technology, early-stage magnet manufacturing, and transparent capital structuring—elements that are barely addressed in the article. A mineral deposit is not a supply chain.
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