Commodities

Metals-Rich Kazakhstan Aims for Niche in Battery Supply Chain, Reports Reuters

Kazakhstan is actively working to increase its production of metals essential for electric vehicle (EV) batteries and is issuing numerous new exploration licenses to attract investments in this sector, according to the country’s industry minister. As a former Soviet republic, Kazakhstan positions itself as a reliable supplier of key materials identified by the European Union, especially as Russia threatens to limit exports and China tightens its control over rare earths. The nation has secured agreements with the European Union and the United Kingdom to supply critical minerals.

Industry minister Kanat Sharlapaev stated in a recent interview, “People know that Kazakhstan is very reliable… We’ve been supplying markets for a very long time.” The Central Asian country, which is the ninth-largest globally by land area but has a sparse population, is endowed with 90% of the elements on the periodic table and is already a major exporter of ferroalloys and gold. Kazakhstan aims to capture a larger market share in battery materials like lithium, cobalt, manganese, nickel, and graphite due to the rising demand for these commodities. While Kazakhstan currently mines manganese, it has recently started processing manganese sulfate and aims to secure 10% of the global market for this battery material. The country also produces phosphates for fertilizers and is looking to process materials necessary for LFP (lithium iron phosphate) batteries, which are becoming increasingly popular.

Sharlapaev, a former banker with Citigroup, emphasized, “Building scalable processing of battery-grade metals is something we want to expand,” noting that existing production facilities could easily be adapted to handle a broader range of materials.

In light of regional geopolitical tensions, particularly from Russia, President Vladimir Putin recently indicated that Moscow might restrict exports of uranium, titanium, nickel, and possibly other commodities in retaliation against Western sanctions. Kazakhstan is a key global supplier of both uranium and titanium and holds 2% of the world’s nickel reserves, although its output has been minimal. The country has yet to fully exploit its lithium deposits, but exploration efforts are currently underway.

To expedite exploration and development processes, the Kazakh government has simplified the exploration licensing procedures and moved them online. As a result, 487 licenses have been issued so far this year, compared to 397 for all of 2023, according to ministry data. Notable mining companies involved in exploration in Kazakhstan include BHP, Rio Tinto, First Quantum Minerals, Fortescue, and Teck Resources.

Moreover, the European Bank for Reconstruction and Development (EBRD) recently acquired a stake in a firm exploring for graphite in Kazakhstan. Although Kazakhstan is a member of Russian-led economic and security organizations, it has maintained a neutral stance in the Russia-Ukraine conflict, pledged to adhere to Western sanctions against Moscow, and is actively involved in developing cargo transit routes that bypass Russia.

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