A Busy Season for Critical Minerals in Central Asia

There are few hotter commodities these days than critical minerals, and they are at the center of intensifying geopolitical competition. Central Asian states, among others, have sought to develop their critical minerals industries, taking advantage of both partnerships with China – which controls 60 percent of global production and over 85 percent of processing capacity for critical minerals – and opportunities for investment from the European Union and the United States.

A casual glance at the recent travels and meetings of Uzbek and Kazakh officials puts this on clear display.

On March 7, Uzbek President Shavkat Mirziyoyev sat for a presentation by Minister of Mining and Geology Bobir Islamov. Per a government readout, Islamov noted that more than 30 metal deposits have been identified in Uzbekistan, including tungsten, molybdenum, magnesium, lithium, germanium, graphite, vanadium, and titanium. He noted plans for 76 projects covering 28 “rare minerals” over the next three years, with an investment of $2.6 billion.

On March 12, U.S. Secretary of State Marco Rubio spoke with Kazakhstan’s Foreign Minister Murat Nurtleu. While the U.S. government’s readout is brief, it does highlight Washington’s eagerness to work with Kazakhstan “to deepen economic ties in the energy, telecommunications, and critical minerals sectors.”

The same day, Kazakhstan’s Minister of Energy Almasadam Satqaliev reportedly met with U.S. Secretary of Energy Chris Wright on the sidelines of an energy conference in Houston, Texas. While the Kazakh government readout highlighted discussion of various oil industry issues – such as projects at Kashagan and Tengiz where American companies have profound investments – they also discussed critical minerals.

Also on March 12, European Commissioner for International Partnerships Jozef Síkela started off on a five-country tour of Central Asia, with “critical raw materials” a top agenda item.

Finally, and also that same week, Mirziyoyev traveled to France for a state visit, which was preceded by the signing of a framework agreement between the two countries to develop a project to extract critical minerals worth $5 million.

These developments are not sudden. They build on efforts over the last few years on the part of Central Asian states to hawk their available wares, and Western states to explore alternative supply options.

When it comes to U.S. efforts, these can be traced back to the Biden administration’s expansion and utilization of the C5+1 format. The first C5+1 Critical Minerals Dialogue was held in February 2024. Plans for the dialogue had been announced in September 2023, an outcome of the first presidential summit between the United States and the five Central Asian states. While the future of the format is arguably in question, as much about U.S. diplomacy is in flux under the new Trump administration, we can expect the focus on critical minerals to remain front and center regardless.

U.S. interests and those of Central Asia’s leaders align, perhaps now more than ever.

In the March 7 presentation, Uzbek officials made clear their goals are not just to extract raw materials and export them, but “increase the purity of minerals, and produce high-value-added products.” In brief, Tashkent is not keen on just digging up the stuff and sending it off to China to be refined and used but aims to elbow its way into the industry.

Mirziyoyev reportedly instructed his minister to focus also on technology transfer, and here U.S. and Uzbek interests may ultimately diverge in the longer term, conflicting with Trump’s aims of reshoring manufacturing. In the short term, however, there are certainly deals to be made.

But Uzbekistan, as well as the other Central Asian states, are not single-mindedly pursuing Western engagement in this sphere. China, arguably, already has an upper hand in the region, having edged out Russia over the last decade. Beijing, as Paul Goble outlined for the Jamestown Foundation’s Eurasia Daily Monitor in a June 2024 article, “has taken the lead, especially in Kyrgyzstan and Tajikistan, where it controls almost all the leases of rare-earth mining, which is fully consistent with its desire to dominate rare-earth markets.”

There are, however, certain sensitivities in Central Asia when it comes to China, particularly in regard to questions of ownership and land. In early March, Uzbek authorities were forced to issue a statement stressing that the recent auction of rights to exploit more than two dozen gold mining plots in the country were not won by Chinese companies. Although the top bid winners had distinctly Chinese company names – such as Xinlong Mining Drilling company – they are (on paper at least) majority-owned by Uzbek citizens.

Rumors continued to churn and in mid-March Ilzat Qosimov, deputy minister of investments, industry, and trade, took to Facebook to stridently reject claims that Chinese companies were seizing Uzbek land. “China is one of the largest investors in Uzbekistan's economy,” he noted, “However, unfounded statements about the alleged ‘seizure’ of Uzbek lands by Chinese companies periodically circulate in the information space.”

“The facts speak for themselves: The majority of Chinese investments are directed towards industry, technology, and energy. Land is not transferred to foreign investors for ownership. In the projects being implemented, the main workforce is Uzbek citizens,” he argued. “Cooperation with China brings technology, investment, and new jobs.”

U.S. and European investments have not yet generated the social backlash that increased Chinese investments have, but public opinion has a tendency to change over time so the possibility cannot be ruled out.

As Aruzhan Meirkhanova, a senior researcher at the Center for Regional Analysis at the Kazakhstan-based National Analytical Center, wrote in a commentary for Carnegie Politika, “The real question is whether [critical minerals] will drive growth or perpetuate dependency, since with substantial critical mineral wealth come development challenges.”

Ultimately, Meirkhanova concluded, “The future of critical minerals in the region will hinge on the ability of governments and international partners to prioritize long-term growth and development over short-term gains.”

That will, indeed, be the true test of whether critical minerals are a curse or a cure for Central Asia’s economic woes – not to mention its geopolitical conundrums.