Turan Research Center

Amid intensifying global competition for critical minerals, the rare earth elements (REEs) market has become a central arena of geopolitical rivalry. China dominates the industry — controlling some 90 percent of global processing capacity — compelling the United States and the European Union to accelerate diversification efforts, while elevating Central Asia and its significant reserves as key targets for new strategic partnerships and investment.

This article provides a comparative analysis of the foreign policy and economic strategies of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan regarding the REE sector. It examines how each nation is pursuing its own approach — ranging from attracting Foreign Direct Investment (FDI) to forging selective regional partnerships. This analysis also assesses how each country's strategy is shaping its positioning within the global market. The findings highlight how Central Asian governments are actively crafting their own economic priorities rather than being passive participants.

Nevertheless, without a coordinated regional approach, these divergent national strategies risk weakening Central Asia's long-term economic bargaining power and geopolitical leverage, leaving the region vulnerable to external actors.

Surging Demand, Shifting Market Dynamics

Rapid technology advancements and the accelerating digitalization of the global economy have driven steady growth in demand for REEs, making them a pivotal component of modern industrial development. Experts estimated the global market at $3.95 billion in 2024, with projections reaching $6.28 billion by 2030, reflecting a Compound Annual Growth Rate of 8.6 percent from 2025 to 2030. This impressive expansion — driven by electric vehicles, renewable energy, advanced defense systems, and microelectronics — underscores the growing strategic importance of these minerals. Rare earths are crucial for various defense technologies, including F-35 fighter jets, Virginia and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs, making secure access to them a core concern for national security planners.

U.S. efforts to scale production of such systems have already encountered significant industrial and supply chain challenges. At the same time, China has moved to tighten export controls on rare earth elements and related materials, including samarium, as part of broader measures affecting dual-use technologies and strategic materials. These controls require export licenses for products containing controlled rare earths and include presumptive denial for defense-related end-users, heightening concerns about potential supply vulnerabilities for U.S. and allied defense industries. Such dynamics illustrate how the concentration of rare earth supply and processing in a single country can translate into geopolitical and defense risks in an era of tightening great-power competition.

Despite their critical role, REEs are costly to extract, requiring sophisticated technology, significant financial investment, and careful management of environmental impact. Conventional rare earth extraction generates large volumes of toxic and radioactive waste that must be treated, significantly increasing cleanup and compliance costs. Meanwhile, the separation of individual elements requires multi-stage chemical processes and high energy inputs, all of which raise operational and capital expenditures. These barriers elevate the importance of nations with substantial reserves.

China, Russia, and India can leverage their strategic advantage by shaping national mining policies, regulating exports and imports of these critical resources, and exerting influence over global supply chains. Through export quotas and domestic production controls, these nations can dictate market conditions, affecting prices, raw material availability, and even geopolitical priorities. As a result, these major rare-earth holders have emerged as important players in the world economy, capable of setting the terms of cooperation with industrialized nations reliant on these critical metals.

However, China's dominance in the market has significantly amplified global dependency risks, pushing major actors such as the United States, the European Union, and Russia to intensify efforts to develop domestic deposits and diversify their supply sources. Yet the sector continues to face significant obstacles: high capital requirements, strict environmental regulations, and persistent geopolitical instability — all of which contribute to the market's vulnerability. Addressing these challenges demands long-term integrated strategies that combine technological innovation, coordinated international partnerships, and sustainable financing mechanisms capable of supporting complex extraction and processing projects.

Against this backdrop, the search for alternative, politically stable, and economically viable sources of rare earth elements has become increasingly urgent. This is where Central Asia gains strategic importance. The region possesses considerable but still underdeveloped REE potential and offers diversification opportunities for global actors seeking to reduce their dependence on China. Kazakhstan, Uzbekistan, and Kyrgyzstan are modernizing their mining sectors, improving regulatory frameworks, and opening their markets to foreign investment, gradually transforming the region into an emerging hub for exploration, processing, and future partnerships.

As competition for secure supply chains intensifies, Central Asia is steadily positioning itself as a key link in the evolving global rare earth landscape.

Central Asia's Potential as an Alternative to China

Central Asia possesses large reserves of REEs, a fact that increasingly attracts world powers seeking to diversify supply chains and reduce their dependence on China. According to the U.S. Geological Survey, the region contains 384 identified REE occurrences and deposits, though their distribution is highly uneven: 160 deposits in Kazakhstan, 87 in Uzbekistan, 75 in Kyrgyzstan, 60 in Tajikistan, and just 2 in Turkmenistan. Such concentration of resources has sparked growing international interest, as major actors look to access these critical minerals.

Kazakhstan holds the leading position in Central Asian REE production, extracting 19 of the 34 critical raw materials considered critical by the European Union. The most significant asset is the Kuiretsykol field, which holds reserves of 800,000 tons and potential resources reaching 935,000 tons. The Kazakh government aims to expand geological exploration dramatically — from 1.5 million square kilometers to 2.2 million square kilometers by 2026. In Kazakhstan, 124 deposits are highlighted in the national 2024–2028 development plan as priority sites, with the lower number reflecting the exclusion of potential or partially explored deposits. This concentration of resources continues to spark international interest, as major actors seek reliable access to these critical minerals.

Kazakhstan has also recorded a significant increase in its projected rare earth reserves, which refer to economically recoverable resources rather than the total number of identified deposits. The State Committee for Geology estimatesthem at 28.2 million tons, placing the country second globally after China. Production capacity is becoming equally important. Taking into account global market trends, President Kassym-Jomart Tokayev has instructed that at least three new enterprises dedicated to REE production and processing be launched within three years.

In addition, Kazakhstan has been actively developing partnerships with Western countries. The U.S. and Kazakhstan signed a memorandum on geological exploration in 2023 and had already established a working group on trade and economic interaction as early as 2022. The United Kingdom has likewise strengthened its cooperation, signing a memorandum on strategic mineral partnership in 2023, followed by a 2024 roadmap outlining cooperation in rare-earth mining. France has also entered the field, formalizing its involvement through a declaration of intent in 2023 and a 2024 roadmap aimed at ensuring a stable supply of critical resources for European industry.

Kazakhstan is also deepening its engagement with Asian partners. South Korean experts have identified a lithium deposit in eastern Kazakhstan with an estimated market value of $15.7 billion. Singapore has also shown interest, formalizing cooperation in the extraction and export of rare earth elements through a 2024 signed agreement.

The economic impact of Kazakhstan's REE strategy is already visible: exports of rare-earth elements have quadrupled since 2020. In 2024, Kazakhstan joined the Partnership for Mineral Safety, a move that further integrated the country into international efforts to secure resilient supply chains. According to the Integrated Development Plan for the Rare and Rare Earth Metals Industry 2024-2028, planned investments in this field should amount to about $5.3 billion.

At the Central Asia-European Union summit held in April 2025 in Uzbekistan, European Commission President Ursula von der Leyen and Kazakh President Tokayev discussed expanding cooperation in the REE sector. Among the key proposals was the creation of a regional center for rare earth elements in the capital, Astana, envisioned as a hub for collecting, processing, and exchanging data on mineral deposits and their development potential.

At the seventh consultative meeting of the heads of state of Central Asia held in Tashkent last November, Tokayev highlighted concrete steps to deepen regional cooperation in the rare earth elements sector. He emphasized the need for Central Asian countries to join forces in attracting advanced technologies and implementing innovative solutions in geological exploration and processing.

Kyrgyzstan also possesses significant REE reserves, with deposits concentrated in key areas such as Talas, Batkensky, and Kamensky. Among the most promising sites are the Kyzyl-Ompol, Kustesai-II, and Quasai-II fields, which contain concentrations of beryllium, molybdenum, lead, bismuth, and rare earth oxides. These metals underpin key industries ranging from aerospace and energy infrastructure to electronics, clean technologies, and defense applications.

In January 2024, President Sadyr Japarov issued a decree entitled "On the implementation of the national project for the production of polymetals and rare earth elements for the dynamic development of the economy of the Kyrgyz Republic." Under this initiative, the government is tasked with creating a specialized scientific and production cluster based on the state enterprise Kyrgyzgeology. Its mandate includes conducting comprehensive studies of prospective polymetal and REE deposits through modern geological and geophysical methods, as well as fostering cooperation with technology companies to introduce advanced extraction and processing technologies.

Recent developments demonstrated Kyrgyzstan's growing engagement with Asian countries in the rare earth elements sector. In February 2025, the government signed an agreement with a Chinese company to develop the Kustesai field — an arrangement that underscores the country's dependence on foreign technology. Natural Resources Minister Meder Mashiev acknowledged that Kyrgyzstan currently lacks the ability to extract certain minerals, including rare earths. In March 2025, Kyrgyzstan also held talks with the South Korean company SK Hynix on potential cooperation to support sustainable supply chains for metals used in semiconductor production.

Despite Kyrgyzstan's clear interest in developing its REE industry and attracting foreign investment, China remains the dominant regional actor. According to an analysis by the nonpartisan Australian think tank, the Lowy Institute, Beijing continues to play a leading role in the development of rare earth deposits not only in Kyrgyzstan but also in Tajikistan, effectively controlling most of the region's productive capacity.

Tajikistan, which holds substantial reserves concentrated in the Karamazor and Altyn-Topkan mountain ranges on the southwestern slopes of Tien-Shan, is pursuing a unique approach within regional politics. Unlike other Central Asian countries that prioritize engagement with global powers, Dushanbe is betting on deepening cooperation with its immediate neighbors. This commitment to regional integration was reflected in the August 2024 memorandum of understanding signed between State Unitary Enterprise "Tajikistan Rare Metals" and Kazakhstan's National Atomic Company "Kazatomprom." The agreement establishes a framework for comprehensive cooperation, including joint exploration, extraction, and REE and uranium processing. It also covers the implementation of research projects, the introduction of innovative technologies, and the training of specialists. Collectively, these measures aim to enhance the region's technological sovereignty and strengthen its capacity to participate more competitively in global critical minerals chains.

A key vector of Tajikistan's foreign economic strategy is its partnership with Russia. President Emomali Rahmon's visit to Moscow in March 2025 affirmed their mutual interest in developing joint projects in the mining industry — especially timely amid increasing geopolitical competition for critical resources. An additional stabilizing factor has been the March 2025 demarcation of the Tajik-Kyrgyz border, which has reduced the risks of bilateral conflicts and created more favorable conditions for regional economic cooperation. Yet for Tajikistan to fully realize the potential of its rare earth industry, it must address persistent infrastructure and technology limitations and attract greater investment in raw material processing.

Uzbekistan possesses significant reserves of rare earth elements, with major deposits located in the Almalyk, Aitima, and Handize regions. To date, more than 30 types of metals have been identified across the country, but their development has long been constrained by insufficient investment. In recent years, however, Uzbekistan has intensified efforts to attract foreign investment. One of its most important partners has been South Korea, which supported the creation of the Center for the Study of Rare Earth Metals on the basis of the Uzbek Smelter of Refractory and Refractory Metals. This center has emerged as a key platform for technological cooperation and knowledge exchange.

President Shavkat Mirziyoyev has set an ambitious goal of developing $500 million worth of projects in the REE field, supported by memoranda signed with the EU in April 2024 and with the U.S. in September 2024. In February 2025, Uzbekistan and Malaysia agreed to deepen cooperation in mineral resources and microelectronics, including the production of high-purity silicon and ultra-pure graphite essential for the semiconductor industry. With 76 projects totaling $2.6 billion announced in 2025, Uzbekistan is rapidly expanding its global REE footprint while balancing competing interests from the West, China, and Russia.

This dynamic creates new opportunities but also requires careful strategic balancing between competing interests. Uzbekistan's approach reflects a proactive industrial policy — one that combines foreign investment with the development of domestic scientific and production capabilities.

Overall, each Central Asian state is pursuing a distinct strategy in the rare earth elements sector: Kazakhstan emphasizes foreign investment and the creation of research centers; Kyrgyzstan and Tajikistan emphasize cooperation with neighboring states and select external partners, while Uzbekistan seeks to build domestic scientific and industrial capacity alongside international investment.

Unlocking Regional Cooperation

Central Asia faces a major strategic challenge: although the region holds significant reserves of rare earth elements, its countries remain heavily reliant on foreign investment — particularly China — for extraction and processing. Deeper regional cooperation offers a pathway to reduce this dependency, strengthen technological capacity, and increase economic resilience — transforming raw-material wealth into strategic leverage rather than a source of vulnerability.

Platforms such as the C5+1, which brings together the five Central Asian states and the United States, provide an important framework for aligning national strategies, pooling resources, and coordinating projects in rare earth elements and related technologies. This format enables countries to negotiate collectively with external partners, attract investment under more favorable conditions, and promote joint research and development.

Alongside international platforms, regional frameworks like the Eurasian Economic Union (EAEU) and the Commonwealth of Independent States (CIS) offer tools for harmonizing policies, facilitating cross-border infrastructure projects, and establishing industrial standards. Practical initiatives — such as joint research centers and integrated R&D networks — can further increase technological expertise and industrial capacity.

The proposals to create a Regional Research Center for Rare Earth Metals in Astana exemplify this approach, aiming to consolidate geological data, coordinate exploration efforts, and serve as a hub for innovation and knowledge exchange. Kazakhstan and Uzbekistan, with more developed research infrastructure, could act as regional anchors, while Tajikistan and Kyrgyzstan would gain access to modern technologies that accelerate domestic capacity and reduce reliance on foreign know-how.

Ultimately, the success of regional cooperation will depend on Central Asia's ability to balance internal integration with strategic engagement with external powers. Combining regional frameworks such as the EAEU and CIS with international platforms like C5+1 — and grounding these in concrete projects in research, exploration, and processing — is essential if Central Asia is to move beyond raw material dependency toward greater strategic autonomy and assume a more pivotal role in the evolving global supply chains for critical minerals.

Global Players in Central Asia: China, U.S., and EU

While regional cooperation is gradually growing, external powers continue to shape the strategic landscape. To be sure, Central Asia is emerging as a critical arena in the global competition to secure supply chains for high-tech and green-transition minerals. Yet China still maintains a dominant position through large-scale investments in extraction and processing; its cumulative investments in Central Asia exceed $63 billion, compared to an estimated $8.2 billion from European partners. Many Central Asian companies and regional experts note that European businesses must accelerate their engagement, as both the U.S. and China are already actively developing new deposits and building integrated production chains.

By opening access to their mineral resources, Central Asian countries seek not only capital but also technology transfer, workforce training, and the adoption of European sustainability standards. They view these as essential for preventing social tensions and mitigating environmental risks. However, significant investments in the sector also raise concerns about mismanagement, which could affect the long-term benefits of rare earth development. It is important to note that regional governments are actively promoting an agenda in which the EU moves beyond raw-material imports to support local processing, infrastructure development, technological modernization, and educational programs. Unlike earlier models centered on large-scale loans and asset purchases, the EU is increasingly expected to promote responsible supply chains grounded in environmental, social, and governance (ESG) principles.

Thus, Central Asia is currently becoming a key point in the global competition for access to critical resources. Aware of the risks associated with excessive dependence on China, the EU is intensifying its engagement in the region, promoting sustainable, transparent, and mutually beneficial forms of cooperation. The EU's key challenge now is to act quickly, offering competitive terms and supporting Central Asian countries in strengthening their technological capabilities, infrastructure, and human resources.

The United States has also stepped up its involvement, investing in domestic processing capacity and fostering partnerships with allied producers to diversify supply chains and reduce reliance on China. If this approach succeeds, Central Asia could evolve from a raw material supplier into a fully integrated partner within a responsible and diversified global system for supplying critical minerals — one that benefits both the region and the broader international community.

Central Asia now stands at a decisive crossroads: its capacity to transition from resource dependency to strategic autonomy will determine whether it emerges as a key player in the 21st-century industrial economy or remains constrained by recurring cycles of foreign dependence.

Zhazira Taubayeva is an international relations expert specializing in Asia-Pacific affairs and their implications for Central Asia. She holds a PhD in International Relations from Al-Farabi Kazakh National University, where her doctoral research examined Asia-Pacific security dynamics and their impact on Central Asia. She also completed advanced security studies at the Asia-Pacific Center for Security Studies in the United States. With more than ten years of experience working with international organizations and policy think tanks, Dr. Taubayeva has contributed extensively to evidence-based analysis and strategic policy research on Central Asia.