The announcement of the U.S.-Ukraine Critical Minerals Agreement created an international deluge of interest in the precious materials that power every facet of cutting-edge technology. However, savvy investors were already on the prowl for a good deal.
American businessman James Cameron, weeks earlier, offered $5 billion to buy out mining company Eurasian Resources Group (ERG). The firm, which is trading at the London Stock Exchange and is partially owned by the Kazakh government, expressed plans to explore for critical minerals in Kazakhstan.
While Cameron's bid was rebuffed, it's not surprising that he tried in the first place. With an advantageous position in global mineral supply chains, ERG was an enticing investment —all the more so because, unlike Ukraine, possible gains are already happening and aren't theoretical.
Critical minerals have risen in importance to become the natural resources defining 21st-century tech. They are necessary inputs for the healthcare, clean energy and defense sectors.
The supply chain for these materials is monopolized by China, which controls around 90% of international refining capacity. Chinese capacity represents 60% of mined rare earth elements and 85% of rare earth processing.
This has created a strategic imperative for Western actors to develop capacity to counter China, compelling them to explore options to extract from diverse mineral-rich locales like Angola, Greenland, and Ukraine, which are all rife with geopolitical risks.
Increasing the supply base of critical minerals is key to mitigating this Chinese lever of influence. By investing in new mining capacity overseas, U.S. companies can derisk procurement across the entire supply chain.
Beyond generating new sources of these minerals, more supply creates higher demand for new, geographically distributed processing capacity, addressing China's twofold advantage.
Cameron's aborted investment showcases the potential of Kazakhstan as a prime supplier of critical minerals that companies in the West need to pursue as China more aggressively utilizes its advantageous position in the market.
Kazakhstan stands out as the best option to produce more critical minerals in short order, as its significant supplies and openness to establishing partnerships in the mining sector allow Western companies to enter the market while contending with limited red tape.
Geological surveys from 2022 uncovered sizable deposits of several minerals, including 75,600 tons of lithium, 4,600 tons of tantalum, 28,100 tons of niobium, 58,000 tons of beryllium, and much more. Kazakhstan produces 20 of the 50 critical minerals identified by the U.S., as well as an unusually high quality.
Such abundant deposits, while promising, mean little without the means to exploit them. The government is looking to ease the extraction process.
The country's 2029 Development Plan includes priorities like developing a geological database, continuing exploration, and removing barriers to obtaining licenses for exploration and production.
Kazakhstan has already started to deliver on these promises, including the establishment of a digitally accessible open subsoil database and the implementation of the 2018 changes to its mining code. This has significantly reduced the obstacles to obtaining mining licenses in the country and the time it takes to process licensing, allowing the country to grant over 3,000 licenses since 2018.
Mining companies can even bid on individual deposits through the country's e-qazyna.kz platform. Given Kazakhstan's existing experience across the mining sectors and the abundant human capital engaged in that work, it's unsurprising that it has managed to expand its capabilities and attract foreign investment.
There are very few soft barriers to mining in Kazakhstan as well, with broader cultural acceptance, fewer densely populated areas that would take issue with mining, and a natural environment that is not as easily damaged by mining.
Between Kazakhstan's high critical mineral potential and its legal and cultural climate open to mining, it has separated itself from the pack of potential investment targets to grow the global supply of critical minerals.
Despite its clear advantages and willingness to heighten mining capacity, Kazakhstan competes with other countries for Western investment and has flown largely under the radar.
Ukraine, for example, has been the subject of significant attention regarding its critical minerals, even though nearby Kazakhstan is already exporting them to the West. This status makes disinterest from American investors and institutions such as the DFC and Export-Import Bank all the more confusing.
This isn't from a lack of engagement. Kazakhstan is a member of the Minerals Security Partnership and an initiator of the Central Asia 5+1 Critical Minerals Dialogue.
If this disinterest from American investors and institutions isn't remedied with action beyond rhetoric, we risk Chinese state-owned enterprises capturing the critical Kazakh minerals market and the opportunity for investment on the ground floor slipping away.
For example, if we want to encourage Kazakh mineral development and exports to the West, slapping a 27% tariff on the country, even if many of its exports are immune, isn't a wise move.
Ukraine's mineral wealth would require companies to undertake significant expenditures and risks to find, extract, and sustain. Ukraine's last geological assessments took place during Soviet times and may not even be usable, as compared to Kazakhstan, which was subject to a mineral survey by USGS as recently as 2022.
Following its war against Russia, Ukraine will have to spend time and money to rebuild its infrastructure and labor force for a productive mining sector to emerge, while Kazakhstan has both at its disposal already.
If Ukraine is a frontier investment, Kazakhstan is settled due to its status as a proven mining power, in large part because Kazakhstan expends a lot of effort in cooperating with U.S. mining schools.
China's restriction of critical mineral exports to gain the advantage in its trade war with the U.S. signals a shift in the minerals race, requiring Western governments and enterprises to consider not only where they can look to grow the global supply base of minerals, but also where they can do so quickly.
Kazakhstan's large proven mineral deposits, conducive political environment, and ongoing support for the mining industry make it the ideal candidate to extract critical minerals soon to offset China's vice grip on the supply chain and bring in profit for investors.
Wesley Alexander Hill is the Assistant Director of the Energy, Growth, and Security Program at the International Tax and Investment Center. Wesley is an expert on grand strategy, geo-economics, and international relations with a regional specialization in China, Eurasia, and Sub-Saharan Africa. Wesley has unique expertise concerning Chinese influence in Central Asia and Sub-Saharan Africa, Chinese foreign and macroeconomic policy as well as Sino-American competition. Wesley can also be followed on Forbes, where he is a contributor. Read more of his reports — Here.