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13/12/2024
Mining News

Kazakhstan: A strategic ally for Europe’s green transition

Kazakhstan’s Minister for Industry, Kanat Sharlapaev, emphasizes a crucial distinction: “We very often confuse availability with reliability.” This statement highlights the challenges faced by global supply chains, particularly as Europe navigates its green transition.

A 2023 study by the Brookings Institution reveals that China produces approximately 60% of the world’s rare earth elements. The COVID-19 pandemic exposed the risks of depending heavily on a single region for critical supplies, and as the demand for these materials grows, Europe must reconsider its sourcing strategies.

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In this context, Kazakhstan emerges as a key ally. Sharlapaev notes that as Europe shifted its industry away over the decades, it lost vital competencies in production. This has led to a new trend called “friendshoring,” which involves relocating production to geopolitical allies to ensure a secure supply chain, prioritizing reliability over mere availability.

Building a strong alliance

Kazakhstan has already demonstrated its commitment to stabilizing Europe’s energy supply, becoming Germany’s fourth-largest energy trading partner. Geographically, it offers advantages, being closer to Europe than China or major South American suppliers, which can help reduce shipping costs and emissions.

Rich in resources

Kazakhstan is indeed mineral-rich. “Either you’re geologically blessed or not,” Kanat remarks, and the country falls into the former category. Out of the 30 elements listed as critical raw materials (CRM) by the EU, Kazakhstan possesses supplies of 17 or 18.

The nation holds significant market shares in various minerals, including 20% of the space-grade titanium market, 10% of manganese sulfate, 30% of global beryllium supply, and about 17% of rhenium. Moreover, Kazakhstan ranks as the 11th largest copper producer worldwide, trailing only Chile, which leads with around 27% of global production.

Enhancing processing capabilities

Kazakhstan’s long-term vision for its mining sector involves bolstering its processing capabilities to enhance the domestic value chain. Sharlapaev highlights the importance of local processing: “If we extracted that concentrate and then exported it abroad, some value will be lost to the country that processes our concentrate.”

By developing its processing infrastructure, Kazakhstan aims to retain more value domestically and create jobs within regional economies. Currently, the mining sector contributes between 12% and 15% to Kazakhstan’s GDP, estimated at around $270 billion (€249 billion), and Sharlapaev is confident this contribution will grow.

Conclusion

As Europe seeks to diversify its supply chains and reduce reliance on China, a strategic partnership with Kazakhstan could play a pivotal role in securing the critical minerals necessary for the green transition. By leveraging its geological advantages and enhancing processing capabilities, Kazakhstan is poised to become an essential player in Europe’s journey towards sustainability.

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