Kazakhstan’s New Parliament Could Usher in Green Energy, Rare Earth Investments

British MP Daniel Kawczynski told NE Global that Kazakhstan and Mongolia can play a key role in reducing the world’s reliance on rare earth metals from China.

Kawczynski noted that over-reliance on Beijing for supplies of rare earth minerals is extraordinarily dangerous.

“We went to war in 1956 over the Suez Canal because we thought the provision of oil could be impeded with the nationalization of the Suez Canal and yet today and tomorrow rare earth minerals are going to be even more vital to Western Europe’s democracies than oil. And as oil runs out, so we move to the next most important commodities, which are minerals and rare earth,” Kawczynski said in an interview with NE Global on March 19.

China accounts for 63 percent of the world’s rare earth mining, 85 percent of rare earth processing, and 92 percent of rare earth magnet production.

“China will use this as a bargaining chip with the West, particularly as tensions over Taiwan and the South China Sea increase. We cannot allow China, which is a Communist dictatorship, to have such a stranglehold over our national economies,” he warned.  “That’s why I and others are urging our own government to divest our over-dependence on China and to move more production and to bring processing expertise to countries like Mongolia and Kazakhstan so that is not just producing rare earth minerals but already turning the rare earth into magnets which are then air cargoed to Europe. We need to create alternative supply chains,” Kawczynski said.

Britain’s Foreign Secretary James Cleverly visited Astana where he reportedly signed a memorandum with Kazakh officials on critical minerals such as rare earth metals.

Kazakhstan has 12% of the world’s uranium resources and in 2019 produced 43% of the world’s uranium. It also has large deposits of rare earth minerals which the West has traditionally sourced from China or Russia.

Kawczynski said a new more dynamic Mazhilis that would introduce laws could facilitate investment.

“Perhaps Kazakhstan had a reputation for having an extraordinarily powerful president and a parliament that was more of a rubber stamp rather than a regular legislative body. It seems they are moving towards a functioning parliament and a constitutional president. That’s the sort of dynamic which inevitably attract more investment, because we can see the system of checks and balances growing in this country. That is a key ingredient to creating confidence,” Kawczynski said.

The upcoming Astana International Forum taking place in June will focus on global issues, including food security, climate change and geopolitics.

Kazakhstan to reduce reliance on Russian gas

Kazakhstan will eventually have to switch to renewable sources, the British MP said, adding that the UK also does not want Kazakhstan to be overly dependent on Russian gas.

Land-locked Kazakhstan, which has massive oil and gas reserves and is geographically larger than the whole of Western Europe, is one of the world’s largest oil producers but is struggling to produce enough gas to supply its own domestic needs.

“Poland has led the way in Europe by building liquified natural gas and importing more liquified gas from the US. It is also buying more gas from Norway, which is a fellow NATO partner. I think that energy security is an extremely important policy for any government. You do not want to be over-dependent on one source. Particularly when that one source can use gas as a weapon or to threaten you. More British companies are coming here, as we are doing in Mongolia, in the areas of hydroelectricity, solar power and green technology. These are huge opportunities for British companies, but also help the Kazakhs and Mongolians to become less dependent on the Russians, so it’s good competition. Competition is very important in any market,” Kawczynski said.

Walking a tightrope between China and Russia

Kazakhstan finds itself in a difficult situation as it is located geographically between Russia, which invaded and continues to wage war on Ukraine, and a rising China.

Commenting on the elections, Yerkin Tukumov, from the Kazakhstan Institute for Strategic Studies, said he hopes the new parliament has a more advanced and pro-active foreign policy approach.

“They have to have knowledge about our foreign policy, but also be much bolder in their interaction with our foreign partners and defend our national interests,” he said, adding that the country’s multi-vector foreign policy remains unchanged and stressed that political reforms were the only way forward.

“The only way to make our country stronger – to be more independent – even in our geopolitical conditions, is through reforms, which are much harder to do in our situation,” Tukumov said, adding, “This is going to be the main answer to all these internal and external challenges.”

This article first appeared in NE Global, and is republished with permission.