00:00If it's available, it doesn't mean that that supply chain is reliable.
00:03They both lost competences and engineering capabilities to actually produce something
00:07that is essentially invaluable to their economies.
00:10It's either you're geologically blessed or not.
00:19Today on The Big Question, I'm joined by Kanat Shalabhayev,
00:22Kazakhstan's Minister for Industry and Construction,
00:24to discuss the role Kazakhstan could play in Europe's green future.
00:27Welcome, thank you very much for joining us.
00:29Can you explain exactly what heavy rare earth elements are and why they're so important?
00:34And rare earth is a bit of a misnomer, right, because they're neither earth nor rare.
00:40Lithium, for example, right, is not an uncommon element.
00:43But economically extractable lithium is quite rare.
00:49The materials are particularly critical to green transition, that's one thing.
00:53And the other thing is, of course, they're heavily used in the electronics manufacturing.
00:59According to a study by Brookings Institution, in 2023,
01:03China was producing about 60% of the world's rare earth elements
01:07and processing kind of 85 of them.
01:09What do you think is the current problem with relying so much on one country?
01:14We very often confuse availability with reliability.
01:20If it's available, it doesn't mean that that supply chain is reliable.
01:23And therefore, a lot of people talk about the availability of rare earth elements,
01:27and therefore, a lot of people talk right now about French shoring,
01:32about making sure that the security of supply is more relevant than the price of its availability.
01:40In many cases, when some of the countries have chosen to
01:44basically shift their manufacturing to various locations,
01:48they both lost competences and engineering capabilities to actually produce something
01:53that is essentially invaluable to their economies.
01:57It's a decade-long process that led to the situation where
02:01resources became very heavily concentrated in very specific locations,
02:05and then processing capacity became very heavily concentrated.
02:10And I think in this case, it's not just about competition,
02:14it's also offering a reliable and secure supply of critical elements.
02:20If you think about European Union, I think out of 30 odd elements on the European
02:27critical mineral lists, Kazakhstan has 17 or 18.
02:32But it's not just we have them in the ground, we are actually able to produce them.
02:37So thinking on the kind of green transition and electric vehicles, for example,
02:41you know, the metals that go into those,
02:44what's kind of the current output abilities of Kazakhstan?
02:47And what could the output become in the future?
02:51It's a very, very complicated question, to be honest.
02:54Because if you think about it, solving the electric vehicle battery problem,
02:59it's a spectrum of solutions.
03:00It's not like this one prevailing technology, like internal combustion engine,
03:04it is obviously some engineering improvements,
03:07but underlying technology is fundamentally the same.
03:10Now, if you think about the battery composition, so there is obviously LNMC battery,
03:16which is lithium, nickel, manganese and cobalt.
03:21It's one of the kind of major technologies right now out there.
03:25Then there's an LFP battery, which is the lithium, ferrum and phosphate.
03:30The metal composition is, of course, relevant,
03:32but getting it to a state where it can be used in a battery,
03:37that's processing.
03:38It's a technological process.
03:39Take manganese in the LNMC battery.
03:42In order to produce the battery, you need high purity manganese sulfate.
03:49And we're already producing this in Kazakhstan.
03:51And right now, we're basically expanding our capacity
03:55to potentially about 10% of the global manganese sulfate market.
04:00It's a precursor for a battery.
04:01So it's what goes into the cathode of a lithium battery.
04:04And the same, for example, phosphates.
04:07Kazakhstan is blessed with one of the largest phosphate deposits in Eurasia.
04:14We're already using them to produce fertilizers,
04:16but we want to expand the product lineup to include the battery-grade materials.
04:22It's now enhancing that processing capability.
04:26And luckily for us, this is one very big, distinct quality of Kazakhstan's mining sector.
04:32If you go to an average mining company anywhere around the globe,
04:36what you find, you'd probably find a material expatriate population
04:41that's operating those mining sites globally.
04:46Not in Kazakhstan.
04:4799% of our workforce is actually our local people.
04:51So mining sector right now employs about 220,000 people in Kazakhstan.
04:56And majority of them are from Kazakhstan.
04:58And it always surprises our international partners
05:03when they come in and visit our mining sites.
05:04And with the expatriates, well, we don't need any,
05:07because we have retained a lot of competencies
05:11and developed a lot of competencies over the years.
05:14And mining engineers, geologists, they're all homegrown talent.
05:25You know, as you kind of look to grow this sector further in the future,
05:29what kind of could this do for the citizens of Kazakhstan?
05:33What could it add to the country's GDP?
05:36Look, I think if you think about Kazakhstan,
05:40we're about $270 billion economy right now.
05:43And we're growing relatively fast.
05:46Last year, we grew about 5.1%.
05:49And this year so far, it's 3.7% of GDP growth.
05:54And we're hoping to get even higher at the end of the year.
05:57And mining sector have been contributing always between about 12 to 15% of GDP.
06:03And I think that contribution can grow.
06:06Kazakhstan is exporting 400,000 tons of copper
06:14and a lot of the concentrate as well.
06:16If we extract that concentrate and then export it abroad,
06:20some value will be lost and retained by the country
06:23who is processing our concentrate.
06:24So we want to basically be able to process the concentrate.
06:29And if we move from concentrate to copper
06:34and then to some ready-made goods out of the copper,
06:38it also increases the value that's retained within the country.
06:42And I think that's kind of the ideology that we're pursuing
06:45when we look at the expanding contribution of the mining sector to the GDP.
06:51Last year, the geological exploration in the country
06:53attracted about $200 million of investors' money.
06:57When we open a mining site,
06:58it can bring workplaces to the areas where it is very difficult to create jobs.
07:05So particularly in Kazakhstan,
07:07which basically has got this vast territory,
07:09nine largest country in the world,
07:11not very dense population.
07:13So we create opportunities to boost the regional economy specifically,
07:18not like just looking at the central cities like Almaty or Astana.
07:22But our long-term vision is, of course, is to deepen the value chain,
07:27to make sure that local content is used by the mining companies
07:31and to ensure that we go from less complicated products to more complicated products.
07:38Okay. Yeah. Brilliant.
07:40Well, thank you so much for joining us today.
07:42It's been fascinating to talk to you and I really appreciate your time.
07:45Thanks.
07:46And thank you for watching.
07:47You can catch more episodes of The Big Question
07:49on the Euronews Business website and on YouTube.
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