Introduction

The global market for raw minerals and materials is undergoing a profound shift, driven by demand for technologies underpinning energy, defence, and digital sectors. In 2025, demand for battery materials like lithium and rare earth elements continued to rise, with battery demand increasing by 35%. Geopolitical fragmentation is also forcing a move toward more resilient supply chains to counter the dominance of a small number of supplier countries, particularly China, in both extraction and refining. While diversification has progressed in extraction, refining remains concentrated. This environment creates a window of opportunity for resource-rich nations like Kazakhstan to attract investment and capture value across refining and downstream industries like battery cell manufacturing.

Kazakhstan currently relies heavily on hydrocarbon exports, which accounted for 15.1% of GDP and over 50% of exports in 2025. This overreliance leaves the economy exposed to global oil price volatility and geopolitical shocks. Consequently, the government has prioritised economic diversification, aiming to double its GDP to $450 billion by 2029. Transition minerals represent a significant opportunity for this push, as the country already produces chromium, magnesium, and copper, and holds substantial underexplored reserves. To align international financing with its low-carbon goals, Kazakhstan launched the QaJET just energy transition investment platform in April 2026.

Kazakhstan’s transition minerals opportunity

The transition to a low-carbon economy presents risks, such as exposure to the European Union’s Carbon Border Adjustment Mechanism (CBAM). Kazakhstan’s economy is emissions-intensive, with a carbon intensity of GDP 70% higher than the global average. Approximately 85% of its electricity generation comes from coal and natural gas. CBAM-related costs for steel and aluminium exports to the EU are estimated at €100 million annually. Additionally, the country is vulnerable to climate impacts like droughts and desertification, which could disrupt industrial operations. In response, Kazakhstan aims for carbon neutrality by 2060 and plans to generate 15% of its electricity from renewables by 2030.

In 2025, the minerals sector contributed approximately 12% to Kazakhstan’s GDP and employed nearly 300,000 people. Kazakhstan is a mid-tier producer of major materials and a major uranium producer, accounting for 40% of global output. According to 2025 estimates, it ranks 3rd globally in chromium and tungsten production and 4th in barite and titanium sponge. It also holds the world’s second-largest chromium reserves. However, only 35% of the country’s geology has been surveyed, and greenfield exploration has lagged for three decades. Much of the mineral output is exported in raw or minimally processed forms, including 99% of copper and 87% of aluminium.

To address these challenges, the government launched the Comprehensive Plan for the Development of the Rare and Rare Earth Metals Industry for 2024–2028. This plan focuses on attracting investment, modernising production facilities, and developing new products like alloys. Five reform pillars have been established: overhauling the licensing system to a first-come-first-served model, creating a National Subsoil Data Bank for geological transparency, targeting priority minerals like lithium and cobalt, providing legal clarity through the Astana International Financial Centre (AIFC), and aligning with international environmental, social, and governance (ESG) standards to access green finance.

International partnerships and Kazakhstan’s transition minerals ambitions

Kazakhstan employs a multi-vector foreign policy, engaging with a wide range of partners including the EU, US, UK, Japan, South Korea, and China. In 2024, it joined the Minerals Security Partnership (MSP), a G7/EU-led bloc focused on high-quality supply chains. The EU signed a Memorandum of Understanding (MoU) with Kazakhstan in 2022 to integrate raw material and battery value chains. Other significant agreements include a 2023 MoU with the UK on critical minerals and a 2025 MoU with the US focusing on domestic processing facilities and technology transfer.

Commercial activity is also accelerating. In 2025, a $1.1 billion joint venture was announced between US-based Cove Capital and Tau-Ken Samruk to develop tungsten and rare earths. Germany’s HMS Bergbau AG acquired majority stakes in Kazakh companies for lithium and cobalt exploration, with potential investments reaching $500 million. China remains a dominant partner, with the East Hope Group planning a $12 billion integrated aluminium complex and the China Nonferrous Metal Mining Group building a $1.5 billion copper smelter. Unlike many Western partners, Chinese engagement is more explicitly oriented toward the processing and manufacturing end of the value chain, including potential battery and wind turbine production.

Summary

Kazakhstan’s ability to leverage international partnerships depends on understanding the geoeconomic objectives of its partners. While the G7 and EU often operate through disjointed bilateral interests, there is significant scope for greater coordination in geological exploration and professional training. The report suggests that Kazakhstan could extend its platform-based approach, modelled on the QaJET platform or Brazil’s Climate and Ecological Transformation Investment Platform (BIP), to create a more coherent ecosystem. This would better align mining and industrial priorities with carbon neutrality targets and energy efficiency goals.

Key considerations for the future include improving coordination among G7/EU allies to avoid duplication and presenting a competitive partnership offer. Kazakhstan must also better anticipate shifts in demand and technology from major economies like China. Learning from other resource-rich emerging markets like Chile and Indonesia could help Kazakhstan position itself to capture greater value from its mineral wealth and successfully move up the industrial value chain from extraction to manufacturing.