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Washington’s Focus on Critical Minerals Opens the Way for Central Asia
Last week, U.S. President Donald Trump met with his Chinese counterpart Xi Jinping in South Korea regarding the state of trade and tariffs between the world’s two largest economies. Both sides indicated, to differing degrees, that the talks were a success. After the talks concluded, Trump announced a potential deal addressing major concerns at the heart of the ongoing trade conflict between the two great powers. While the deal touches on many issues, it includes a provision on a subject of increasing importance to the Trump administration’s foreign policy: critical and rare earth minerals.
Xi agreed to drop tighter export rules on rare earth elements that China had announced Oct. 9. The new rules would have instituted a version of the “foreign direct product rule,” a policy used by the United States for decades, under which companies outside China would have had to win special approval from the Chinese Ministry of Commerce to export products that contained even trace amounts of China-sourced rare earth elements. Since China exercises an effective monopoly on extraction and processing of rare earth elements central to many high-end civilian and military technologies, the rules would have given China a major strategic advantage over all importers of those goods, not just the United States.
Mineral Diplomacy
Maintaining secure access to and expanding the availability of rare earth elements and other critical minerals has been a focal point of the Trump administration’s policy agenda. Earlier this year Trump signed executive orders aimed at bolstering domestic mineral production and expanding seabed exploration and extraction. Two days before meeting with Xi, the administration announced a joint framework deal with Japan to support the development and supply of critical minerals to both economies.
The U.S. will have the opportunity to build on these successes Nov. 6 when Trump hosts a summit of Central Asian leaders in Washington under the auspices of the C5+1 framework. The summit comes on the heels of two multibillion-dollar deals between the U.S. and Central Asian states in September. Mining is expected to be a top issue at the summit, with the U.S. already laying the groundwork to expand its investment in Central Asia’s critical minerals sector. U.S. Department of Commerce officials are pushing for a deal with Kazakhstan to give a private U.S. entity development rights to major deposits of tungsten there. Top U.S. State Department officials recently concluded a four-day Central Asian trip, meeting with Uzbek and Kazakh ministers on numerous issues, including critical minerals.
The Profits for Central Asia
While U.S. objectives for this push are focused – increased access to sources of critical and rare earth minerals not controlled directly or indirectly by major rivals – the Central Asian states’ goals are more diverse. During the State Department tour, both Uzbek and Kazakh officials sought U.S. development cooperation in sectors including industry, digitalization, and agriculture. Kazakhstan, specifically, is hoping for broad changes to its trade relationship with the U.S., including a repeal of 1970s-era Jackson-Vanik trade restrictions.
For the U.S., Central Asia’s mineral resources offer an important alternative source of critical minerals. Although Xi agreed to drop the additional Chinese export controls, that deal – if it holds – will expire in 2026. Thus, securing an alternative source of these minerals is even more of a national security imperative. By some indications, Central Asia’s extensive proven mineral resources could be just the tip of the iceberg. No comprehensive geological surveys of the region’s mineral wealth have been conducted, and there is no current, digitized geological database of known resources. Investments in surveying, along with mining, could give the U.S. the chance to both discover previously unknown and untapped sources of critical minerals and secure the rights to their extraction.
Central Asian leaders undoubtedly will take advantage of the leverage these resources give to gain U.S. government and private investment in key sectors of the economy. Central Asian states are contending with several concurrent issues – including dwindling water resources and crumbling infrastructure – as they strive to modernize their economies.
Ensuring U.S. investment in these areas could spark an economic and political boon in the region, as would investment in efforts to promote economic and governance digitalization. One approach could be a “minerals for tech” swap, wherein U.S. firms are given mining and processing rights to critical mineral fields in exchange for access to technologies such as AI chips.
Even if deals granting mineral extraction rights move forward, both sides must consider how to export those resources once they have been mined. Exports from landlocked Central Asia to the West are logistically difficult. However, Central Asian states could entice the U.S. to spend big on infrastructure investments, especially on projects connected to the Middle Corridor trade route running through the Caucasus to the Black and Mediterranean seas. The U.S. has already expended time and energy to promote the project regionally. More investment in infrastructure would generally strengthen regional trade networks, fostering economic development in areas of the economy beyond mining.
Both sides have more than purely economic motivations to reach deals. The Central Asian states have long been looking to break out of both Russia’s and China’s economic and political orbits to extend economic, political, and cultural connections particularly to the U.S. and the European Union. Similarly, the United States’ drive to diversify its sources of critical minerals is driven by geopolitics as much as economics. By building ties with the Central Asian states beyond resource extraction, the U.S. could capitalize on regional feelings of angst toward those heavyweights while also limiting both competitors’ influence in their own backyard.
While the region’s five republics and the United States are likely to strike several deals this week, the administration’s recent diplomatic actions indicate that expanding the U.S. supply of critical minerals and rare earth elements will be a top priority. For the Central Asian states, the C5 +1 Summit represents an opportunity to secure financing and support that could supercharge their economies.
These mutually beneficial goals represent excellent opportunities for both sides Nov. 6.
The views expressed in this article are those of the author and not an official policy or position of New Lines Institute.