By Zulkhayo Nishanova, Assistant teacher, UWED

Rare earth metals comprise a group of 17 chemical elements used in the production of batteries, permanent magnets, electronics, renewable energy equipment, electric transport, and high-tech industries. These materials play an important role in the global energy transition, digitalization, and the development of modern industry.

Global Market and Trends

Global reserves of rare earth elements are unevenly distributed. According to the U.S. Geological Survey, a significant share of proven reserves is concentrated in a limited number of countries, including China, Brazil, India, and Australia.

The modern market structure is shaped not only by raw material extraction, but also by processing, separation of elements, and the production of high value-added products. Participation in such value chains determines countries’ competitiveness in the global market.

Demand for rare earth metals is steadily growing amid the development of green energy, electric mobility, and digital technologies. According to estimates by the International Energy Agency, this growth is structural and long-term in nature and is expected to intensify over the coming decades.

Opportunities for Central Asia and Uzbekistan

Countries of Central Asia possess promising mineral resource potential and benefit from a favorable geographic location between the markets of Europe and Asia. This creates preconditions for their deeper integration into international supply chains for critical minerals.

Uzbekistan views the development of rare earth metals as one of the pillars of industrialization and economic diversification. Ongoing reforms in the field of subsoil use and improvements in the investment climate create favorable conditions for the implementation of projects in geological exploration, mining, and primary processing of raw materials.

A prospective participation model envisages phased development:

• geological exploration and mining with the participation of international partners;
• establishment of primary processing and beneficiation capacities;
• in the medium term, localization of selected components manufacturing for the energy and industrial electronics sectors.

International Partnerships

Uzbekistan is expanding cooperation with a number of foreign partners in the field of critical minerals and processing technologies. Engagement with the European Union, the United States, and Japan is aimed at developing resilient supply chains, attracting investment, introducing environmental and social responsibility standards (ESG), and strengthening technological cooperation.

Partnership projects are viewed as a tool to increase domestic value added and strengthen industrial capacity.

Conditions for Sustainable Sector Development

The development of the rare earth metals sector requires a comprehensive approach that includes:

• attracting long-term investment;
• developing processing and research & technological infrastructure;
• training qualified personnel;
• introducing modern environmental standards and mechanisms for public engagement.

A balanced industrial policy helps avoid locking the country into the role of, exceptionally, a raw material supplier and creates conditions for gradual upgrading along the technological value chain.

* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.