Tapping into Kazakhstan’s rare earths potential

Context: As the world accelerates its transition to cleaner energy through
cutting-edge technology, the demand for rare earths has increased globally.
India, the third-largest carbon emitter, is pivoting to renewable energy and
faces a growing need for rare earths. Despite being the fifth-largest holder of
rare earth elements, India relies heavily on China for imports as it lacks
advanced technologies for extraction. Amid supply chain disruptions and
security concerns tied to China’s dominance in this sector, New Delhi is
diversifying its sources through agreements with the U.S., Latin American, and
African countries to mitigate dependency on China. In this context, Kazakhstan
emerges as a promising and strategically closer alternative.

Rare Earth Elements

·       About: Scandium,
Yttrium and the 15 Lanthanides, lanthanum (La), cerium (Ce), praseodymium (Pr),
neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd),
terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm),
ytterbium (Yb) and lutetium (Lu) are considered as the Rare Earth Elements.

·       Applications: Electronics
- Rare Earth Elements are used in high-technology devices such as
smartphones, hard disks, digital cameras, fluorescent and light-emitting-diode
lights, computer monitors and electronic displays.

Green
Technologies - They play a critical role in green technologies such as wind turbines
and electric vehicles that are going to support net zero carbon emissions
goals.

Healthcare - REEs are also
used in advanced medical technologies like MRIs, laser scalpels, non-irritating
antiseptic dressings, and even some cancer drugs.

·       Concerns
and Challenges: Rare Earth Dilemma - Despite its
applications in green and emerging technologies, the extraction of REEs causes
environmental damage.

Health risks - Rare earth ores
are often laced with radioactive thorium and uranium, which can cause
detrimental health effects while extracting.

·       Initiatives
in India: Initiatives like the setting up of a Rare Earth Theme Park and joint
ventures aim to enhance India's position in this critical industry. RE and
Titanium Theme Park was developed by IREL to cater for the technologies
developed by BARC.

Key points

·       Overview: India’s
reliance on China and the possible global changes with a new U.S. government
show the need to diversify. In this situation, Kazakhstan is emerging as a
promising and closer alternative.

·       Current
reserves and potential of Kazakhstan: Number of Deposits -
Kazakhstan has 15 registered rare earth deposits located primarily in three
regions: Turkistan, Kostanai, and Mangystau. These deposits are crucial for
electronics and clean energy technologies.

·       Potential
for Growth: Strategic Importance - The Kazakh government views rare earths as
the “new oil” for its economy, emphasizing their role in technological
advancement and energy transition. President Kassym-Jomart Tokayev has
identified the development of these metals as a priority.

Global Demand
Trends - The demand for REEs is projected to increase significantly in the coming
years, driven by their essential role in renewable energy technologies and
high-tech industries. The International Energy Agency (IEA) estimates that
demand for rare earth elements could increase three to seven times by 2040.

International
Partnerships - Kazakhstan is actively seeking partnerships with countries like the
U.S., Germany, and Japan to enhance its mining capabilities and attract foreign
investment. This collaboration could position Kazakhstan as a key supplier in
the global REE market.

·       Monopoly
of China: Dominance in Global Production and Supply - China controls over
one-third of the world’s rare earth reserves and produces about 70% of global
rare earths, making it the leading supplier. India relies on China for 60% of
its rare earth imports due to insufficient domestic production.

Strategic
Leverage Over Supply Chains - China’s ability to disrupt mineral and technology
supplies during bilateral disputes enables it to control global rare earth
supply chains.

·       Importance
of Rare Earth Minerals for India: India is fifth largest
holder of rare earth minerals (6% of the world’s rare earth reserves); however,
it only produces 1% of global output and meets most of its requirements of such
minerals from China. REEs contribute towards a total value of nearly $200
billion to the Indian economy. Some REEs are available in India which include
Lanthanum, Cerium, Neodymium, Praseodymium and Samarium, etc. Monazite and
thorium are the principal source of rare earths.

·       Challenges
facing India in REE Landscape: Insufficient domestic production -
India is facing the twin burden of insufficient domestic production and
increasing demand of REEs from sectors like electronics, defence, and clean
energy.

Reduced ore
supplies from Russia - Russia’s invasion of Ukraine has further exposed
the risks of concentrated supply chains, resulting in India and Western nations
to seek sustainable, diversified alternatives.

·       Way
Forward for India: Renewable Energy Targets - India’s COP29
pledge to achieve 500 GW of renewable energy by 2030 highlights the importance
of REEs like dysprosium for clean energy technologies.

Diversification
-
Current over-reliance on China for rare earths highlights the necessity for
diversified sourcing, with Kazakhstan offering a viable alternative.

Development of
regional market - Establishing a regional market through
India-Kazakhstan collaboration can reduce reliance on China and enhance
resource security for India.