Central Asia is becoming increasingly critical on the world stage in terms of rare earth elements and strategic minerals. These resources have become indispensable in many sectors, from modern technology to the defence industry, from renewable energy to advanced manufacturing processes. Since rare earth elements have a wide range of uses, from semiconductors to batteries, from military equipment to wind turbines, countries with these minerals are strategically important. While the competition of global powers in this field is increasing, the riches of Central Asia turn the region into not only an economic centre of attraction but also a geopolitical battleground.
Actors such as the U.S., the European Union, China and Russia are trying to increase their influence in the region in order to have more say over these strategic resources. While China and Russia aim to keep mineral resources under control by utilising their historical and economic ties in the region, Western countries see Central Asia as an important alternative to reduce their dependence on China. For this reason, countries in the region are trying to turn global competition in their favor, moving beyond being just raw material suppliers and striving to create more added value by processing their minerals.
What Central Asia offers
Central Asia harbors a large proportion of the world’s most critically important minerals. A total of 384 rare element deposits in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan were documented by the U.S. Geological Survey in 2016. Central Asia has 38.6% of the world’s manganese ore, 30.07% of chromium, 20% of lead, 12.6% of zinc and 8.7% of titanium. In addition, the region is home to rare earth elements such as scandium, yttrium and lanthanides, which are indispensable elements in the production of advanced technology.
President of Kazakhstan Kassym-Jomart Tokayev has described rare earths as “new oil,” emphasizing the importance of these resources for economic development. These elements are used in high-tech products such as electric vehicle batteries, wind turbines, semiconductors and military equipment. Given China’s global dominance in this field, this potential in Central Asia offers a strategic window of opportunity for the West. At the same time, these resources are critical for the economic development and energy independence of the countries in the region. The wealth of resources has the potential to make the region a center not only for energy transformation but also for technological innovation.
This potential of Central Asia can also lead to major changes in global supply chains. Western countries are positioning Central Asia as an alternative resource center to break China’s monopoly on rare earth elements. In addition, the aim of the countries in the region to go beyond being just raw material suppliers by processing these riches is also noteworthy. Countries like Kazakhstan and Uzbekistan are trying to build a value-added economy by processing rare earths into high-tech products.
West’s increasing interest
In recent years, the U.S. and the EU have focused on strengthening their strategic influence in the region by increasing their investments in the mining sector in Central Asia to reduce dependence on China. The U.S. has been supporting mining of rare earth elements, especially in Kazakhstan, while aiming to balance China’s economic dominance in the region through multilateral initiatives such as the Mineral Security Partnership (MSP).
The Biden administration allocates $25 million to increase trade diversity and promote investments within the scope of the Economic Resilience Initiative (ERICEN), launched in 2022, while accelerating cooperation on rare earth mining in the region through the C5+1 Critical Minerals Dialogue. It also supports economic reforms in the region through initiatives such as the U.S.-Central Asia Trade and Investment Framework Agreement (TIFA) and the Improving the Business Environment in Central Asia (IBECA), which encourage investment by American companies. While the U.S. State Department is deepening cooperation in the field of energy and infrastructure within the framework of the Partnership for Global Infrastructure and Investment (PGI), it was announced that the G-7 plans to invest $ 200 billion in Central Asia by 2027 and a significant portion of these investments will be directed to Kazakhstan.
The EU is expanding its mining and energy cooperation with Kazakhstan and Uzbekistan to diversify the critical minerals it needs for the energy transition. French company Orano is investing $500 million in uranium in Uzbekistan, while Germany and Italy are also interested in rare earth mining projects. In the framework of critical raw material co-operation between the EU and Central Asia, a 3 million euros ($3.3 million) agreement to be executed by the European Bank for Reconstruction and Development (EBRD) is being implemented, while a 200 million euros framework loan agreement between the European Investment Bank (EIB) and the Development Bank of Kazakhstan (DBK) will finance sustainable transport and renewable energy projects.
In digital connectivity projects, the EU aims to connect rural areas in Kazakhstan through the 55 million euros Team Europe initiative under the Global Gateway strategy. The EU-Central Asia Summit in Samarkand in April will further strengthen these partnerships. These Western investments in the region offer economic opportunities to Central Asian countries and aim to balance the influence of China and Russia. The countries in the region seek to increase their economic independence and become more competitive thanks to these projects.
Counter moves of China, Russia
China continues strengthening its position in the region with major infrastructure projects and economic investments to maintain its influence over critical minerals in Central Asia. Chinese investments in the region, totalling $63 billion, are predominantly focused on mining and infrastructure. As of mid-2024, mining and resource extraction investments alone reached $36.2 billion, accounting for 61.7% of total investments in Eurasia. Under the Belt and Road Initiative (BRI), China has a significant stake in rare earth mining in Kazakhstan and Kyrgyzstan. China National Nuclear Corporation’s plan to build three nuclear reactors in Kazakhstan also reinforces Beijing’s energy and mining strategy in the region. With all these investments, China aims to maintain its global leadership in rare earths by increasing its influence in the region against the efforts of the U.S. and its allies to diversify the supply chain.
In 2021-2023, the trade volume between Russia and the five Central Asian countries averaged around $41-42 billion annually. This shows Moscow’s success in maintaining economic ties despite Western sanctions. Russia is trying to maintain its regional influence by supporting the mining sector, especially in Tajikistan and Kyrgyzstan. Rosatom plans to build a small-scale nuclear power plant in Tajikistan, while Russian officials are committed to modernising the country’s mining infrastructure. In addition, Russia’s strategic role in the uranium supply chain in Kazakhstan also reinforces its influence in the region. Moscow uses energy and mining projects as a foreign policy tool to keep Central Asia in its sphere of influence.
Is policy of balance sustainable?
In the competition among global powers, Central Asian countries try to utilise their resources in a balanced and multilateral strategy in line with sustainable development and national interests. In this process, economic diversification, infrastructure development and the expansion of international diplomatic spheres of influence have been created through increased investments and technology transfer. However, this policy of balance also carries serious risks for regional stability. The growing economic and political influence of China and Russia may narrow the room for manoeuvre of the countries in the region, while the insufficient investments offered by the U.S. and the EU may make them even more dependent on Beijing and Moscow. Moreover, increased dependence on external actors may bring problems such as environmental destruction, income inequality and geopolitical manipulations. Price fluctuations, especially in the rare earth elements market, may adversely affect the income stability of the countries in the region and disrupt their economic prospects.
Central Asia’s future will therefore depend on how long it can maintain a policy of balance and manage the competition among global actors. The states of the region will have to pursue a more careful strategy in order to maximise their economic opportunities while preserving their independence. The mineral wars in Central Asia stand out as an important factor that will determine the future of not only the regional but also the global economy. It remains to be seen whether the advantages of this competition will outweigh the disadvantages it will bring to the region in the long run, or whether a resource economy squeezed between great powers will emerge in the coming period.