April 7, 2025 | Economy & Geopolitics
Amid global attention on trade wars and geopolitical tensions, a major announcement from Kazakhstan went largely unnoticed last week: the discovery of the country’s largest rare earth deposit to date, with an estimated one million tonnes of critical minerals such as cerium, lanthanum, neodymium, and yttrium. These elements are essential for clean energy technologies—and potentially, the next generation of defense systems.
Shortly afterward, a more widely reported move followed: the European Union pledged €12 billion in investment across five Central Asian nations—Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan—during its inaugural summit with the region. Officially, the initiative aims to “strengthen ties.” In reality, it marks a strategic pivot tied to mineral security and geopolitical autonomy.
Kazakhstan at the Center of EU’s Strategic Interests
The announcement comes at a time of rising trade friction with the United States, notably following Washington’s imposition of a 20% tariff on EU imports. European Commission President Ursula von der Leyen stated that the funding will support key sectors such as transportation, clean energy, digital connectivity, and sustainable resource development—strategic areas for Europe’s green and industrial transitions.
With 22.6% of Central Asia’s trade already involving the EU and over 40% of its foreign direct investment originating from Europe, the new funding aims to deepen this relationship. A key goal: to bypass Russian-controlled transit routes by developing alternatives like the Trans-Caspian International Transport Route (TITR), which could dramatically cut shipping times between China and Europe while avoiding politically sensitive corridors such as the Suez Canal and Russian territory.
Minerals as Modern Power
Beyond diplomatic language, the EU’s true motivation lies in the urgent need to secure critical mineral supplies—vital to its defense capabilities, green energy ambitions, and digital sovereignty. In 2023, Europe imported 94% of its rare earth elements from China, Malaysia, and Russia, a dependence that Brussels now views as a strategic liability.
China, which produces 60% of the world’s critical minerals and controls 85% of their processing, has demonstrated its leverage through export restrictions on key materials like antimony—used in military optics and night vision systems. These moves have highlighted Europe’s vulnerability and accelerated efforts to diversify supply sources.
Central Asia: Rich in Resources, Limited in Infrastructure
Central Asia, particularly Kazakhstan and Uzbekistan, offers an increasingly attractive alternative. Kazakhstan alone currently produces 19 of the 34 critical minerals identified by the EU and could expand that list to 21 in the near term. Uzbekistan ranks as the world’s fifth-largest uranium producer and holds major deposits of gold, silver, titanium, and molybdenum.
The region also possesses lithium, silicon, and tungsten—key components in batteries, solar panels, and electronic defense systems. However, much of this wealth remains untapped due to outdated infrastructure and limited technological capacity. That’s where the EU’s investments are expected to play a crucial role.
A Different Model from China and Russia
According to reports from Deutsche Welle, Brussels is seeking to distinguish its approach from that of Beijing and Moscow by promoting joint ventures and local industrial partnerships rather than resource extraction alone. This model, centered on the EU’s €300 billion Global Gateway initiative, promises long-term development and economic diversification for partner nations.
Central Asian leaders have welcomed the opportunity to reduce dependency on Moscow and broaden their geopolitical options. The planned development of the TITR, with an estimated cost of €18.5 billion, could boost regional container traffic eightfold—from 100,000 to 800,000 units—with transformative economic implications.
Balancing Development and Geopolitical Tensions
Yet, the EU’s ambitions are not just economic. The bloc is also attempting to counter Russia’s use of Central Asia as a sanctions evasion route. European leaders, including Estonia’s Prime Minister Kaja Kallas, have warned that Russian firms must not exploit the region to bypass Western trade restrictions imposed after the invasion of Ukraine.
Thus, the EU is pursuing a delicate balance: offering real economic development through infrastructure and trade, while demanding political alignment on sanctions enforcement—an approach analysts describe as “carrot and stick” diplomacy.
Implementation Risks
Despite high-level commitments, experts like Marie Dumoulin of the European Council on Foreign Relations caution that the EU’s Global Gateway projects suffer from slow execution and low visibility. Without faster rollout and stronger diplomatic engagement, Brussels risks losing ground to China and Russia, whose influence in the region remains deep and entrenched.
Looking Ahead: Critical Minerals as the New Currency of Power
What’s clear is that Europe’s renewed interest in Central Asia is not a symbolic gesture, but a strategic response to its need for greater autonomy in defense, technology, and energy. In an increasingly fragmented global economy shaped by tariffs and supply chain disruptions, critical minerals have become a new form of geopolitical capital.
If the EU succeeds in turning promises into tangible infrastructure, it could not only secure vital resources but also help shape a new Eurasian trade architecture—one less dependent on autocratic powers and more aligned with democratic and sustainable values.