The European Union has secured billions of euros to help the area diversify supply chains and lessen reliance on China. According to experts, the aim is to provide attractive incentives and foster domestic industries while promoting environmentally friendly extraction methods.
The inaugural EU summit with the five energy-abundant nations of Central Asia will center on key minerals essential for expanding defense capabilities and supporting the union’s environmental transition.
The European Union is showing strong interest in Central Asia, which includes countries like Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan, because they have come to understand that Europe relied excessively on China for essential minerals.
As EU Commission President Ursula von der Leyen and European Council President Antonio Costa convene with Central Asian leaders in the Uzbek city of Samarkand, discussions around sustainable development and Russia’s efforts to circumvent sanctions, along with other topics, will take place.
However, the majority of focus will be directed towards developing the necessary infrastructure to exploit the area’s valuable resources.
Central Asia: Crucial for Critical Minerals Supply Chains
According to Eurostat, the European Union’s statistical agency, “Strategic raw materials, also known as Critical Raw Materials (CRMs), are essential for numerous key industries such as the net-zero sector, digital technology, aviation, and defense.”
In 2023, China accounted for approximately 60% of the world’s production and more than 85% of the processing of crucial minerals. The European Union imported 94% of its rare earth elements from China, Malaysia, and Russia collectively that year.
Nevertheless, China stands as a crucial Russian ally and is developing its own green technology sector, a process that demands the same minerals. Consequently, it has previously imposed limitations on the export of at least one vital mineral, resulting in
concerns in the EU
regarding potential disruptions to their supply chains.
Lately, China has imposed limitations on the export of antimony, a mineral utilized in night vision devices, precise optical instruments, and multiple military uses.
According to experts, Central Asia represents an alternate supply source for much of what Europe needs.
“Many crucial raw materials required by the EU can be found in Central Asia,” said Samuel Vesterbye, who leads the think tank European Neighborhood Council, during an interview with LFHCK ID.
For example, silicon is essential for solar panels, specific kinds of tungsten are required for radars and additional military gear, with lithium being the most well-known requirement for batteries.
The Central Asian countries abound with numerous resources, including several you mentioned, yet most of this wealth remains locked within their underdeveloped mining industries.
The European Institute for Asian Studies (EIAS) highlighted that there is substantial room for increasing production capabilities. According to their findings, Kazakhstan presently accounts for 19 out of the EU’s 34 crucial raw materials and is expected to boost this number to 21. Additionally, they pointed out that Uzbekistan stands as the globe’s fifth-biggest producer of uranium and possesses abundant reserves of silver, titanium, molybdenum, and gold.
Experts indicate that the EU’s initiatives focus on infrastructure development to assist Central Asian countries in extracting these minerals sustainably, which could also benefit the region indirectly.
assist the EU in broadening its supply sources
.
Unlike China and the US, the EU proposes collaborative partnerships with Central Asian firms,” Vesterbye stated, adding, “This leads to increased investment, industrial development, and expansion opportunities for local enterprises. This concept resonates well with the leadership in Central Asia.
The European Union is pouring billions into Central Asia.
The area is a significant component of the EU’s €300 billion ($324 billion).
Global Gateway Project
This initiative is positioned as a competitor to China’s Belt and Road Initiative and emphasizes the development of the Trans-Caspian International Transport Route (TITR). The corridor aims to enhance connections between the EU and Central Asia, reducing transit times to approximately 15 days.
It is estimated that the Central Asian governments require €18.5 billion to build the necessary infrastructure. Last January, over half of this amount was secured during an investor conference funded partly by contributions from EU member countries, along with investments from the private sector and financial institutions such as the European Investment Bank and the European Bank for Reconstruction and Development.
Marie Dumoulin, who leads the Europe Program at the European Council on Foreign Relations (ECFR), stated via email to LFHCK IDthat fostering connectivity within Central Asia and with this region forms a key part of the EU’s strategy towards Central Asia.
To attract Central Asia away from competing interests like Russia and China, though, the EU must take an active and prominent role.
“Countries in Central Asia ought to gain advantages from the Global Gateway initiative; however, tangible projects are progressing slowly and remain largely unnoticed. To become a formidable competitor in this area, the EU must address these issues,” she stated.
The TITR is praised as the quickest path from China to Europe, serving as an alternative to the Suez Canal and Russia. According to Vesterbye, an expert at the European Neighborhood Council, upgrading the infrastructure along this route could greatly increase trade volumes.
“Right now, just below 100,000 containers reach the European Union from Central Asia. However, once this route becomes operational and upgraded, the EU could receive over 800,000 containers,” he stated.
He mentioned that the EU plans to utilize the summit for concentrating on “boosting business-to-business agreements,” as well as acquiring additional crucial minerals. “It seems likely that the EU would seek enhanced infrastructure development, including more bridges, ports, and mining activities.”
Developing infrastructure to counteract Russia’s sanctions avoidance?
Last week, during her visit to Ashgabat, the capital of Turkmenistan, the European Union’s highest-ranking official, Kaja Kallas, addressed the topic of how Russia is utilizing the countries in Central Asia.
to avoid sanctions.
She stated that Russian businesses should not utilize Central Asia as a means to circumvent these limitations.
Some experts suggest that to counter Russian influence in the former Soviet states, the EU needs to use a carrot-and-stick approach and that a development partnership could have various advantages.
According to a recent analysis by The Royal United Services Institute (RUSI), a UK-based think tank, backing infrastructure development can showcase Europe’s dedication to establishing robust long-term trade ties that encourage collaboration in other sectors, like sanction enforcement.
Edited by: Rob Mudge
Author: Anchal Vohra (based in Brussels)
