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Uzbekistan targets rare earth dominance: A strategic shift towards global leadership

Uzbekistan’s President Shavkat Mirziyoyev has underscored the importance of developing the country’s rare-earth mining sector, positioning it as a top priority for his administration due to the nation’s substantial reserves. The Uzbek government is actively collaborating with the European Union, the United States and the United Kingdom to establish strategic partnerships for the extraction of rare earth elements. This initiative aims to provide alternatives to reliance on Russian reserves, although the challenge of China’s dominance in processing capabilities remains.

On April 29, President Mirziyoyev convened a meeting to discuss policies for the mining and metallurgical industry. As a result of government initiatives and targeted programs, the output of Uzbekistan’s geological sector reached nearly $11 billion in 2023. The government is focused on enhancing the country’s rare-earth mining capabilities by showcasing its vast reserves and revising legal and economic frameworks to attract foreign direct investment (FDI).

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Earlier in April, Uzbekistan and the European Union signed a memorandum of understanding to form a strategic partnership in developing sustainable value chains for critical raw materials. EU Executive Vice-President Valdis Dombrovskis highlighted that this agreement would help the EU secure vital access to critical raw materials, supporting Uzbekistan’s goals for economic diversification and sustainable development in its extractive industries.

Uzbekistan’s longstanding interest in rare earth elements was highlighted by a 2018 US Geological Survey study that identified 87 deposits of rare earths and rare metals in the country . These elements, including beryllium, lithium, and vanadium, are typically found in complex and expensive-to-extract forms rather than as independent minerals.

In April 2019, the Almalyk Mining and Metallurgical Combine (AGMK) launched Central Asia’s first center for rare-earth metals research in Chirchiq, supported by South Korean research institutes. This center, established through a 2017 agreement between Uzbekistan and South Korea, is considered the most technically advanced for rare-metal research in the region.

While most of Uzbekistan’s current mineral production involves precious and non-ferrous metals, there is significant untapped potential for rare-earth element production. The country has discovered over 30 types of such minerals and possesses extensive reserves of critical metals including gold, copper, and uranium . In April, Mirziyoyev directed his government to collaborate with international partners on $500 million worth of projects to produce rare earth metals.

During the April 29 meeting, Mirziyoyev emphasized the importance of expanding exploration and development of deposits for critical raw materials such as lithium, graphite, and rhenium. Discussions also covered a new $300 million project in powder metallurgy, an area previously undeveloped in Uzbekistan. The meeting noted a recent agreement with the EU on critical raw materials, providing greater access to European markets. Uzbekistan is also home to Central Asia’s second-largest reserves of copper, molybdenum, and gold, which are pivotal for attracting FDI to its rare-earth initiative.

At the Third Tashkent International Investment Forum on May 2, Mirziyoyev addressed over 2,500 foreign delegates from 93 countries, outlining new proposals to strengthen investor protections, including a draft law “On Investments” aligned with World Trade Organization standards. He emphasized the priority of joint mineral resource development with foreign investors.

Mirziyoyev also announced strategic cooperation agreements with the EU on raw materials and plans to develop similar partnerships with the US and UK. He invited leading companies to engage in the deep processing of strategic raw materials and creation of value chains. To further attract EU, US, and UK investors, he revealed plans for a new “On Subsoil” law, designed to provide a stable and transparent legal framework for investors in Uzbekistan’s rare-earth mining sector.

Increasing the production of high-value materials aligns with Mirziyoyev’s campaign pledges during his June 2023 reelection, where he promised to double Uzbekistan’s GDP to $160 billion by 2030 and increase GDP per capita to $4,000. Key projects include three new copper processing plants and a copper refining complex, aimed at significantly boosting the country’s output of copper, gold, silver, and uranium.

However, Uzbekistan faces competition from Kazakhstan, where President Kassym-Jomart Tokayev has prioritized the development of rare and rare-earth metal deposits, referring to them as the “new oil.” Tokayev’s administration views the exploitation of these resources as essential for technological progress and economic growth.

Uzbekistan’s and Kazakhstan’s initiatives have significant geopolitical implications. Success in developing their rare-earth assets could reduce reliance on Russian reserves and potentially disrupt China’s dominance in the sector. Both countries are motivated to enhance their market positions and increase their influence, especially in Europe, despite the potential challenges posed by the current processing bottlenecks dominated by China. Given the substantial economic and strategic benefits, Uzbekistan and Kazakhstan are likely to intensify their efforts in the rare-earth sector, which may significantly impact the global supply chain dynamics.

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