Tapping into Kazakhstan’s Rare Earths Potential (GS Paper 2, IR)
Context
- India, a key player in the global shift toward clean energy, is facing a significant challenge in securing sufficient rare earth elements (REEs).
- Despite being the fifth-largest holder of these resources, India heavily depends on China for its REE imports, as it lacks the advanced extraction technologies needed to fully exploit its own deposits.
- Amid geopolitical shifts and supply chain disruptions, India is looking to diversify its sources, and Kazakhstan has emerged as a promising alternative.
China’s Monopoly on Rare Earths
- China’s Dominance: China controls over one-third of the world’s rare earth resources and about 70% of its production, making it a dominant force in the global supply chain. India sources roughly 60% of its rare earth imports from China, which presents a significant vulnerability.
- Risks of Over-reliance: China has previously disrupted the supply of critical minerals, such as antimony, due to geopolitical tensions. In December 2023, it even imposed a ban on critical technologies for rare earth extraction and magnet production, further emphasizing its control over the sector.
- Geopolitical Impacts: The war in Ukraine has worsened supply chain disruptions, particularly for antimony, used in clean energy and military technologies. This situation has pushed India and Western nations to seek more sustainable and diversified supply chains.
Why Kazakhstan is Important
- Kazakhstan’s Role: As a close ally of India, Kazakhstan offers a strategically close and resource-rich alternative for meeting India’s growing demand for rare earths. Kazakhstan holds 15 of the 17 known rare earth elements, positioning it as a key player in global supply.
- Strategic Partnerships: Kazakhstan has already entered extraction agreements with Japan, Germany, and other global partners, including the U.S., South Korea, and the European Union. This further strengthens its potential to challenge China’s dominance in the rare earth sector.
Kazakhstan’s Rare Earth Reserves and Capabilities
- Rich Reserves: Kazakhstan’s rare earth reserves are vast, and the country is well-positioned to expand its extraction of elements such as dysprosium, a critical rare earth element for clean energy technologies.
- Strategic Minerals: Kazakhstan is a global leader in the production of beryllium, scandium, tantalum, and niobium, essential for telecommunications, nuclear reactors, and clean energy technologies.
- Full-Cycle Production: Kazakhstan hosts some of the world's only full-cycle production facilities for beryllium and scandium, and is investing in lithium, battery materials, and magnets, signaling its intent to expand further into the rare earths and strategic minerals market.
Complementing India’s Efforts
- Resource Security: Kazakhstan’s vast mining potential aligns with India’s growing need for rare earths to fuel its renewable energy goals. India aims to achieve 500 GW of renewable energy by 2030, requiring significant supplies of dysprosium and other rare earth elements.
- Technological Collaboration: Kazakhstan’s advanced extraction technologies, along with India’s growing focus on renewable energy, could enhance resource security for both countries. Kazakhstan's metallurgical plants extract minerals essential for clean energy, such as bismuth, antimony, selenium, and gallium, supporting India's renewable energy goals.
The Way Forward
- Diversification Strategy: India’s heavy reliance on China for rare earths, combined with recent geopolitical uncertainties, underscores the need for diversified sourcing. The India-Kazakhstan collaboration in the rare earth sector could provide India with a more secure and sustainable supply.
- Increased Mining Output: India plans to increase its rare earth mining output by 400% over the next decade, but technological advancements are needed to bridge gaps in both India and Kazakhstan’s extraction capabilities.
- India-Central Asia Rare Earths Forum: Proposed by India’s National Security Adviser, the forum aims to boost partnerships, facilitate joint mining ventures, data sharing, and sustainable extraction practices, reducing both countries’ reliance on China. It will also foster private sector investments, training, and the creation of a regional market for rare earths.
Conclusion
- Kazakhstan’s vast rare earth reserves and advanced extraction capabilities present an opportunity for India to reduce its dependence on China for critical resources.
- The growing India-Kazakhstan partnership, coupled with technological collaborations and the establishment of the India-Central Asia Rare Earths Forum, could help secure India’s rare earth supply while promoting sustainability in the global energy transition.
- By diversifying its sources and tapping into Kazakhstan’s resources, India can strengthen its position in the global rare earth market and support its ambitious renewable energy goals.
