Commentary: Beyond the ‘Resource Trap’ ― Central Asia Bets on Value-Added Mining

The recent China-Central Asia summit marked a significant step forward in regional cooperation, with a focus on modernization and the high-quality development of joint projects. Key outcomes included the adoption of the Astana Declaration and the signing of 12 agreements under the Belt and Road Initiative (BRI), covering areas such as personnel exchange, environmentally friendly mining, infrastructure investments, and trade and industrial cooperation. These agreements are expected to foster future investment collaboration between China and Central Asia across multiple sectors, holding considerable economic potential for the region [para. 1].

Given Central Asia's vast mineral wealth, the article analyzes the opportunities and challenges facing investors, regional governments, and local communities. It cautions that all stakeholders must consider local realities and priorities to ensure sustainable development [para. 2]. Central Asia is home to some of the world's largest reserves of critical minerals such as manganese (38.6% of global reserves), chromium (30%), lead (20%), zinc (12.6%), and titanium (8.7%). This has made the region an attractive destination for investment in mineral extraction and processing [para. 3].

Amid increasing global demand for rare earth minerals used in green energy and defense, the analysis highlights Central Asia’s growing role. A 2018 survey by the U.S. Geological Survey identified 384 deposits of rare earth elements and metals across the region, with Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan collectively holding significant untapped potential [para. 5]. Uzbekistan, for example, has discovered large deposits, including 174,000 tons of lithium and 15.2 million tons of graphite. The country plans to launch 76 projects on rare minerals valued at $2.6 billion by 2029 and increase investment in exploration, although only 40% of its territory has been explored so far [para. 6].

Several partnerships with European investors have begun, with high-profile projects such as MS Bergbau AG’s planned $500 million investment in Kazakhstan’s lithium sector and the European Bank for Reconstruction and Development’s stake in Sarytogan Graphite [para. 7]. Western governments, including the United States and the European Union, are increasingly engaging Central Asia at the highest political levels. The U.S. hosted the first C5+1 Critical Minerals Dialogue in 2024, an effort supported by both the Biden and Trump administrations. The EU, meanwhile, allocated €2.5 billion from a €12 billion investment package specifically for critical raw materials [para. 8][para. 9].

However, the growing competition among global powers for Central Asia’s resources raises the risk of neocolonialist dynamics in which local elites and foreign firms profit while local populations face environmental and social costs [para. 10]. There is widespread agreement across the region on the need for transparent governance and equitable revenue distribution to avoid these negative outcomes [para. 11].

Regional consensus also emphasizes the dangers of over-reliance on raw material exports, including heightened economic risk, environmental harm, and social inequality. Governments are prioritizing local processing and the development of finished products for the global mineral supply chain, giving preference to investors who support these efforts [para. 13]. There is a strong push for economic liberalization, improved infrastructure, and a digitalized economy, leveraging the region’s young, educated workforce—60% of whom are under 30—to drive diversification and integration into the global economy [para. 14][para. 15].

Overall, the region is increasingly channeling investments into high-tech, renewable energy, and knowledge-intensive industries to improve living standards and ensure sustainable growth [para. 17][para. 18]. Despite its continued reliance on commodity exports, Central Asia’s strategic pivot towards deep processing and value addition in minerals is expected to enhance its long-term economic prospects [para. 19]. [para. 1][para. 2][para. 3][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11][para. 13][para. 14][para. 15][para. 17][para. 18][para. 19]