On February 8, 2024, the U.S. Division of State hosted the inaugural assembly of the Critical Minerals Dialogue (CMD) within the C5+1 format, chaired by Below Secretary for Financial Progress, Vitality, and the Setting Jose W. Fernandez.
The initiative to carry a dialogue on important minerals was introduced by the presidents of the USA, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan at the C5+1 Summit, which befell in New York in September 2023. The primary goal of the CMD is to broaden Central Asia’s participation in international provide chains of important minerals, strengthen financial cooperation, promote a transition to wash vitality, and defend the distinctive ecosystems of the area.
America counseled the contributions of the 5 Central Asian nations in advancing new partnership alternatives and funding prospects, in addition to their efforts to proceed the dialogue via nationwide coordinators throughout the framework of the C5+1. In response to the press launch, the prospects for cooperation have been mentioned throughout the context of the CMD, together with the initiatives of the “Partnership for Mineral Useful resource Safety” and “Partnership for International Infrastructure and Funding.” The Central Asian representatives expressed their curiosity in attracting American investments within the improvement of important minerals. Nevertheless, consultants from the Caspian Coverage Middle be aware that financing these initiatives on the size of China’s Belt and Highway Initiative (BRI) might pose challenges.
Countering China’s Dominance: Potential Threats to U.S. Nationwide Safety
CMD is a part of a broader U.S. technique to counter China’s dominance within the provide chains of important minerals. Important minerals corresponding to nickel, cobalt, palladium, and uncommon earth parts (REEs) are essential for high-tech industries and protection techniques. Important minerals are additionally essential for the transition to “inexperienced” applied sciences, as minerals like lithium, manganese, and chromium are important parts of renewable vitality applied sciences.
As tensions between Washington and Beijing escalate, U.S. dependence on China for important minerals more and more turns into a strategic vulnerability. In response to the U.S. Division of Commerce, China currently controls practically 60 p.c of uncommon earth mining operations, over 85 p.c of processing capabilities, and greater than 90 p.c of everlasting magnet manufacturing, posing a possible risk to U.S. nationwide safety. In December 2023, Beijing had introduced restrictions on the export of sure important minerals, in addition to mining and processing applied sciences. This export management raised issues that China may use mineral assets as leverage in diplomatic discussions on safety and the economic system.
On February 14, U.S. Secretary of Vitality Jennifer Granholm emphasised that she is “very concerned” about China’s management over the availability chain of important mineral assets. The secretary said that the USA will “collaborate with friends” to satisfy the rising demand for important minerals.
In December 2023, the Worldwide Tax and Funding Middle, a non-profit group based mostly in Washington, launched a report titled “Leveraging Central Asia’s Uncommon Earth Parts for Financial Progress,” which analyzes the abundance of REEs within the area. Particularly, Central Asian nations maintain 38.6 p.c of world manganese ore reserves, 31 p.c of chromium, 20 p.c of lead, 12.6 p.c of zinc, 8.7 p.c of titanium, and significant reserves of different supplies. China already has vital affect within the mining sectors of Tajikistan and Kyrgyzstan, whereas Kazakhstan and Uzbekistan look like extra open to Western private and non-private funding on this sector.
Central Asia’s Abundance of Important Minerals and Funding Alternatives
From 2012 to 2018, the USA Geological Survey (USGS) carried out an inventory of mineral deposits all through Central Asia. Throughout that interval, 384 occurrences of uncommon minerals have been recognized, together with 160 in Kazakhstan, 87 in Uzbekistan, 75 in Kyrgyzstan, 60 in Tajikistan, and two in Turkmenistan. At the moment, as a part of a joint undertaking between the State Committee of Geology of Uzbekistan and the USGS, a research of the nation’s mineral useful resource reserves is being carried out, with a complete funding of $2.3 million from the USA.
Particular consideration within the report is given to Kazakhstan, which possesses the most important reserves of identified REEs within the area. Kazakhstan additionally holds the world’s largest reserves of chromium and the second-largest reserves of uranium, and it maintains robust positions in lots of different mining sectors. For example, in 2020, Kazakhstan earned more revenue from copper exports than from pure gasoline exports for the primary time.
In his tackle to the nation in September 2023, Kazakh President Kassym-Jomart Tokayev said that the event of REE deposits ought to develop into a precedence process, referring to those metals because the “new oil.” U.S. Ambassador to Kazakhstan Daniel Rosenblum has mentioned he’s assured that initiatives for the extraction and processing of the important supplies involving American companies will quickly emerge within the nation.
The preservation of dependable entry to those supplies has develop into an integral a part of the financial and nationwide safety of Western European nations. For instance, Tokayev mentioned the extraction of critical minerals with French President Emmanuel Macron throughout his go to to Kazakhstan in November 2023. Moreover, in June 2023, the U.S. Division of State held an identical dialogue with Mongolia, and in December 2023, France initiated an inaugural strategic dialogue on important minerals with Australia.
Diversification Transportation Routes and Vitality Safety in Central Asia
Regional integration initiatives aimed toward lowering dependence on Russia will stay within the focus of the West, as these initiatives may improve Europe’s vitality safety via diversification of provide routes. Transportation routes bypassing Russia and China are a essential situation for Western investments, and the event of the Middle Corridor might be essential for transporting important minerals from Central Asian nations to international markets.
In 2023, Kazakhstan bought two oil tankers to move its oil to Europe via the Caspian Sea, bypassing Russia. Nevertheless, this accounts for under 2 p.c of Kazakhstan’s exports, and it’s anticipated that Kazakhstan’s dependence on Russian vitality infrastructure for oil exports will stay excessive within the medium time period. Nonetheless, this underscores Kazakhstan’s personal geopolitical and financial pursuits in looking for new alliances and commerce relations past its relationship with the Kremlin.
A report by the Caspian Coverage Middle in 2022 really useful that the U.S. Geological Survey broaden its work with Central Asian nations to assist them harness their useful resource potential. Using their expertise in attracting personal investments and facilitating cooperation between U.S. companies and Central Asia, the report emphasizes the need for the Central Asian mineral improvement to mobilize personal financing. It’s anticipated that within the medium time period, the USA will embody know-how switch and technical help alongside funding for the event of important mineral deposits. Nevertheless, at present, the USA has not allotted funds to CMD or promised any investments.
In conclusion, the dialogue on important minerals signifies the U.S. curiosity in enhancing the position of Central Asia in international provide chains for important mineral assets. This initiative can function a catalyst for public-private partnerships that develop the mineral useful resource base of Central Asia and, thus, cut back U.S. dependence on China in know-how manufacturing. The competitors to realize management over important mineral provide chains, that are important for future industries, is intensifying. The end result of this race in Central Asia’s nations, considerable in invaluable assets, has the potential to form the worldwide steadiness of financial and technological energy for a few years forward.
