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EU–Central Asia Critical Raw Materials: From Partnership to Supply-Chain Security

Policy Analysis 8/2026
By Kristin Höltge & Sarah Pavlis
DOI: https://doi.org/10.83003/pa_8_26

About the authors:

Kristin Höltge, MA 
is an Affiliated Researcher and a Senior Professional with experience in International Affairs and development, the private sector and research. Most recently, she led the Central Asia Desk at the Organisation for Security and Co-operation in Europe (OSCE) and served as a Political Advisor to a former EU Special Representative for Central Asia. Prior to this, she worked for OSCE and Deutsche Gesellschaft für Internationale Zusammenarbeit in advisory and managerial roles in Kyrgyzstan, Ukraine and Afghanistan. Kristin started her career with Berghof Foundation and International Crisis Group. She holds an MA from Freie Universität Berlin and has recently completed a CAS programme on Peace Mediation and Dialogue with Basel University in cooperation with swisspeace.

Sarah Pavlis, MA  
holds a Master’s degree from the Diplomatic Academy of Vienna, where she completed her thesis on the mahalla system and local governance in Uzbekistan. Before her Master’s, she obtained a Bachelor’s degree in Social and Human Sciences from the Université libre de Bruxelles (ULB).
Her fields of interest include governance and social organization in post-Soviet societies, regional cooperation in Central Asia, and the evolving role of Turkic states in international relations.
At the institute, she worked from October 2025 until January 2026 as an intern under the supervision of Dr. Cengiz Günay, focusing on Turkish foreign policy, particularly diplomatic relations with the U.S., EU and Central Asia.

Executive Summary

Critical raw materials (CRMs) have advanced in just a few years from a specialized industrial niche topic to the centre of geopolitical discussions. China’s tightened export controls, culminating in its extraterritorial measures announced in October 2025, have made supply security an urgent strategic priority for the European Union. Against this backdrop, Central Asia has emerged as a key partner in the EU’s efforts, to diversify its supply chains and reduce critical dependencies. This growing partnership is anchored in the EU’s strategic partnerships with Kazakhstan and Uzbekistan and has been reinforced by the 2025 EU–Central Asia Summit in Samarkand and President Tokayev’s visit to Brussels in June 2026. Building on Global Gateway and the Team Europe approach, the EU has developed a more comprehensive policy and financing framework for securing critical raw materials, notably through the Critical Raw Materials Act and the subsequent RESourceEU Action Plan, alongside the launch of its first Strategic Projects. With the framework now largely in place, the task ahead is delivery.

Despite progress and strong political commitment, several challenges need to be addressed if the EU is to genuinely diversify its supply chains:

• Persistent dependence on China:European supply chains remain heavily dependent on China, particularly for processing and refining.
• Competition from other external actors:The EU risks being outpaced by actors able to mobilise investment and implement projects more rapidly.
• Limited local value creation:An extraction-focused model risks reproducing existing dependencies while generating insufficient value added in Central Asia.
• Connectivity bottlenecks:Capacity and infrastructure constraints along the Trans-Caspian/Middle Corridor continue to limit its potential as a reliable supply route to Europe.

The task ahead is to translate the strong existing political architecture into bankable projects and diversified value chains at sufficient speed. This requires the EU to focus on five priorities:

• Build integrated value chainsby strengthening support for midstream processing and local value creation in both Central Asia and Europe.
• Integrate the Middle Corridor into the EU’s critical raw materials strategyto better connect supply diversification with connectivity policy.
• Accelerate the Strategic Projects pipelineand move projects more rapidly from designation to implementation.
• Speed up financing and offtake arrangementsto provide greater certainty for investors and producers.
• Strengthen coordination across EU instruments and Member Statesto improve coherence and delivery.

Thereby, the EU’s comparative advantage should be utilized, including standards, regulatory cooperation, geological data and skill development through initiatives such as SECURE CRM, which supports the alignment of the region’s resource governance with international transparency standards, and DATA4CRM, which modernises the region’s geological data.

Keywords: EU, critical raw materials, supply-chain security, Central Asia

 

1. Why Central Asia Matters for EU Critical Raw Materials Security

The EU’s growing demand for critical raw materials, driven by the digital and technology transition at the intersection of defence, industry and green energy, is increasingly difficult to meet through domestic extraction and processing. The EU’s mining capacity and processing and refining capacity remain limited, while recycling is not yet sufficiently developed to close the supply gap. At the same time, export restrictions and supply-chain disruptions from China have highlighted the risks associated with dependence on a limited number of external suppliers.

Against this background, Central Asia is gaining importance as a potential source of diversified and more secure critical raw material supply chains for the EU. Kazakhstan and Uzbekistan are particularly important in this context, given their resource potential and growing strategic partnerships with the EU. Kazakhstan alone holds reserves of at least 21 of the 34 materials on the EU’s official list (OECD, 2026), including significant potential in uranium, chromium and zinc, and possesses established production capabilities and logistics infrastructure. Uzbekistan is copper-rich and is strongly advancing its downstream industrialisation, while the wider region holds globally significant resources of manganese, chromium and other strategic minerals. The region can therefore contribute not only additional sources of raw materials, but potentially new processing and value-addition capacity.

With the 2021 EU Global Gateway as strategic connectivity investment framework and Team Europe as its financing mechanism in place since 2020, this policy paper examines how the EU uses its existing policies and instruments to move from EU-Central Asia partnership to securing essential critical raw materials for its supply chains. A key element of this connectivity agenda is the Trans-Caspian Transport Corridor, or Middle Corridor, which links Central Asia to Europe via the Caspian Sea and the South Caucasus, providing an alternative route for trade and supply chains between the two regions. The paper first analyses the geopolitical rivalries surrounding critical raw materials, focusing on China’s position as the dominant exporter and the United States as an EU key competitor for access to resources in Central Asia. Building on an assessment on progress achieved so far, it identifies remaining vulnerabilities and risks to the EU’s supply-chain security. It concludes by deriving recommendations for further EU action to strengthen and diversify access to critical raw materials from Central Asia.

 

2. Competing geopolitical interests: The EU, China and the United States

To secure a sustainable and resilient supply of critical and strategic raw materials, the EU adopted the Critical Raw Materials Act (CRMA), Regulation (EU) 2024/1252, in April 2024. The Act identifies 34 critical raw materials (CRMs), 17 of which are classified as strategic, and sets benchmarks for strengthening EU domestic capacity by 2030: at least 10% of annual consumption of strategic raw materials should be extracted within the EU, 40% processed in the EU, and 25% met through EU recycling capacity (European Union, 2024). In comparison, the US list of CRMs tends to be broader, with 60 items listed, and is heavily oriented toward national security and defense supply chains (US Department of the Interior, 2025). The subsequent RESourceEU Action Plan issued in 2025 (COM(2025)945) goes further, concluding that domestic capacity alone will not be enough, calling for external diversification alongside it, and warns that the EU must move faster: for battery production, rare earths and defence value chains, reducing dependency on a single country of origin by up to 50 % by 2029 (European Commission, 2025).

The EU’s diversification efforts cannot be considered in isolation from the broader geopolitical competition surrounding CRM extraction, processing and trade. As demand for these resources grows globally, access to critical raw materials has become an increasingly important element of economic security, industrial policy and strategic competition. Against this backdrop, China’s dominant position across several critical raw material value chains and the United States’ increasing efforts to diversify its own supply chains are particularly relevant for the EU’s engagement with resource-rich Central Asian countries.

China’s position is particularly pronounced in rare earth elements, which are essential for technologies ranging from electric vehicles and wind turbines to robotics, aerospace, defence and medical applications. The International Energy Agency (IEA) estimates that China accounted for around 60% of global mining of magnet rare earths in 2024, but as much as 91% of global refining (International Energy Agency (IEA), 2025b). This concentration in processing gives China a critical chokepoint even over raw materials extracted elsewhere.

This dominance extends well beyond rare earths. Across the 20 energy-related strategic minerals analysed by the IEA, China was the dominant refiner for 19, with an average market share of around 70% (International Energy Agency (IEA), 2025a). The EU is particularly exposed to this concentration: China supplies 100% of the EU’s heavy rare-earth elements, according to the European Commission’s 2024 Niinistö report (Commission, 2024, p. 87), while 98% of EU demand for rare-earth permanent magnets is met by imports from China, according to DG GROW (European Commission, n.y.) .

However, in 2025 China adopted a series of export controls covering various heavy rare earth elements, as well as related compounds, metals and magnets.[1] These restrictions extend extraterritorially to industrial and defence-related products containing certain Chinese-sourced critical raw materials. Beijing frames the measures as a national security safeguard aimed at preventing Chinese-origin materials from contributing to other countries’ military capabilities.[2] Although some of the measures have been temporarily suspended by the Chinese government until November 2026, the restrictions demonstrate that China’s dominant position in CRM supply chains is not simply a commercial advantage but a potential geopolitical leverage. For the EU, the implication is clear: diversifying extraction alone is not enough. Without parallel diversification of processing capacity, a critical vulnerability in the supply chain will remain.

The EU is however, not alone in seeking closer ties with Central Asia’s critical raw materials sector. The United States launched the C5+1 Critical Minerals Dialogue[3] in 2024 and has since begun to translate political engagement into concrete cooperation and investment. In November 2025, the United States and Kazakhstan signed a Memorandum of Understanding on Critical Minerals Cooperation. This was followed by growing US interest in Kazakhstan’s mining sector, including Cove Capital’s Kazakh tungsten project, which has attracted interest in US government-backed financing. The US International Development Finance Corporation (DFC) has issued a Letter of Interest for up to USD 700 million, while the US Export-Import Bank has issued a separate Letter of Interest for a credit line of up to USD 900 million (Astana Times, 2026). Similarly, DFC launched a Joint Investment Framework with Uzbekistan in June 2026 (United States International Development Finance Corporation (DFC), 2026), illustrating the urgency for the US to secure relevant critical raw materials in Central Asia.

The combination of Chinese rare earths export controls and accelerating US efforts to establish strategic critical mineral cooperation with Central Asia makes the region an increasingly competitive arena for projects, offtake agreements and processing partnerships. For Brussels, the question is therefore no longer to enhance its political framework for cooperation with Central Asia, but to translate the existing partnership architecture and financing instruments into bankable projects and integrated value chains at sufficient speed.

 

3. From EU-Central Asia Partnership Architecture to Project Delivery

The EU’s partnership with Central Asia has moved beyond political declarations towards a developed institutional and financial architecture. The foundations rest on two strategic partnerships: the EU-Kazakhstan Memorandum of Understanding, established in November 2022 and covering raw materials, batteries and renewable hydrogen across four areas of cooperation, with implementation guided by a 2025–2026 roadmap; and the EU-Uzbekistan Memorandum of Understanding, launched in April 2024 and focused more directly on critical raw materials. Its operational roadmap was finalised in November 2024. Both gained momentum at the EU-Central Asia Summit in Samarkand in April 2025 (Council of the European Union, 2025), which launched a USD 12 billion Team Europe Global Gateway package for the region (European Commission, Directorate-General for International Partnerships, 2025), including roughly EUR 3 billion for critical raw materials, alongside an EU-Central Asia Declaration of Intent on CRMs and commitments to the Trans-Caspian Transport Corridor (Joint Declaration following the First European Union-Central Asia Summit in Samarkand, Uzbekistan, 2025).

The EU has also established dedicated instruments to move from political commitments towards project development. A joint facility with the European Bank for Reconstruction and Development (EBRD), signed in 2024 under the InvestEU programme, provides equity for CRM exploration and aims to mobilise around EUR 100 million (European Bank for Reconstruction and Development, 2024). Its clearest output to date is the EBRD’s stake in the Sarytogan graphite deposit in Kazakhstan[4], subsequently designated a Strategic Project under the EU Critical Raw Materials Act (CRMA) — currently the only such project in Central Asia. The EU-funded DG GROW CRM project, launched in March 2025 and implemented by the EBRD, adds technical assistance, feasibility financing and regulatory support to build a pipeline of bankable projects.

Commercial activity is developing alongside these EU-level initiatives, with much of the actual investment driven by Member States and European companies. France’s Orano Group signed an agreement with Uzbekistan’s state-owned enterprise Navoiyuran in March 2025 to develop the South Djengeldi uranium deposit through their Nurlikum Mining joint venture, with a first phase valued at USD 214 million and Japan’s Itochu subsequently joining (Orano Group, 2025). German firms and banks have also committed to rare-metals exploration and processing in Kazakhstan (HMS AG, 2023) and to copper-smelting capacity in Uzbekistan (Daryo news, 2024). President Tokayev’s June 2026 visit to Brussels generated further commercial agreements and, importantly, a Kazakh proposal for an offtake-based cooperation model to support domestic processing and a Regional Rare Earth Research Centre (Astana Times, 2026).

The political frameworks, financing instruments and early commercial projects are therefore increasingly in place. The remaining challenge is to connect them into a larger pipeline of bankable projects and integrated value chains. The strategic question for the EU is whether it can move from individual initiatives and political commitments to projects that deliver extraction, processing, transport and reliable supply to European industry at sufficient scale and speed.

 

4. Risks to the EU’s Supply-Chain Security

As outlined above, the EU’s partnership with Central Asia has reached the point where the main risks are no longer primarily political. They concern whether resources identified through the partnership can be converted into diversified, commercially viable and resilient supply chains.

Delivery risk in this partnership is not uniform: the EU, Central Asian partners, and the broader business stakeholders each face a distinct exposure. The following three analyses distinguish between these perspectives to lay the ground for the recommendations section.

4.1. Risks for the EU

Risks to the EU are of geopolitical nature and related to its own work flows.

Dependence on Chinese Processing: China dominates refining for most strategic minerals and is projected to retain a major share of refined lithium, cobalt, battery-grade graphite and rare earths through 2035. Its position therefore extends beyond ownership of mineral deposits to the critical processing stages through which raw materials are transformed into inputs for European industry.

For the EU, avoiding dependence on Chinese processing should therefore be a central objective of engagement with Central Asia. This requires developing alternative processing and refining capacity, both within Central Asia where commercially viable and through complementary capacity in Europe. Building such capacity would help ensure that Central Asian minerals can enter diversified supply chains rather than remaining dependent on established Chinese processing networks.

Delivery speed: EU’s political and institutional architecture may not translate into projects quickly enough. The central issue is not a lack of political commitment: the EU has established strategic partnerships, mobilised Global Gateway financing, created dedicated project-development instruments and designated its first Strategic Project in the region. The risk is that the time required to move from political agreement to feasibility studies, financing, offtake and financial close is longer than the pace at which competing partners are securing commercial positions.

With only one CRM Act Strategic Project designated to the region to date (Sarytogan graphite deposit in Kazakhstan), the EU risks being seen as strong on architecture and slow on execution. If Brussels does not match other project’s tempo, first-mover advantage in offtake agreements and processing joint ventures may pass to Washington, or to Beijing, before EU-backed projects reach financial close.

Multi-vector balancing: Central Asian governments are deliberately diversifying their partners – engaging the EU, the US, China, Japan (via Itochu) and others in parallel to maximise investment and leverage. This is a rational strategy for the region, but it also means no single partner, including the EU, can assume durable exclusivity; commitments made today can be outcompeted by faster or more generous offers tomorrow.

4.2. Risks for Central Asia

The Central Asia countries are concerned about the potential for domestic industrial development, the access to European markets and the availability of geological data.

Extraction-only trap: For Central Asian countries, the key risk is that growing foreign interest in critical raw materials reinforces an extraction-led model without generating sufficient domestic value addition. Kazakhstan and Uzbekistan aim to use their resource base to support broader industrial development, including investment in processing, technology, skills and downstream production. Without secured offtake and co-located processing, however, they risk exporting raw ore or concentrates while higher-value stages remain elsewhere. This would also limit the EU’s diversification gains, as Central Asian extraction could continue to feed established processing chains rather than create alternative sources of processed materials.

There are already efforts to pursue greater value addition, including Uzbekistan’s Technological Metals Complex and Kazakhstan’s proposed offtake-based cooperation model and Regional Rare Earth Research Centre. The EU can support this shift by linking European demand, investment and technology to processing capacity in Central Asia. This requires treating extraction and processing as a connected development challenge, with reliable feedstock, long-term offtake, skills, energy and financing. Such an approach would allow Central Asian partners to capture more value while providing European industry with more diversified sources of processed critical raw materials.

Data and governance gaps: Much of the region still relies on outdated, Soviet-era geological survey data, while geological information is often fragmented, difficult to access or not reported according to internationally comparable standards. State-owned enterprises also retain a significant role in the sector, contributing to regulatory and commercial uncertainty. These gaps raise project-preparation costs, slow due diligence and make it harder for foreign investors to assess resource quality, ownership and development risks. The result is a higher barrier between political commitments and bankable projects, particularly where significant exploration, infrastructure and processing investment is required.

Connectivity dependence: For both the EU and Central Asian partners, the strategic value of new CRM production ultimately depends on the ability to move materials reliably to European markets. Kazakhstan and Uzbekistan are landlocked, with Uzbekistan doubly so, making westward connectivity a critical condition for turning resource development and regional processing into commercially viable exports. The Trans-Caspian Transport Corridor, or Middle Corridor, therefore sits at the centre of the emerging EU–Central Asia value-chain strategy.

The corridor has developed rapidly, with cargo volumes rising substantially in recent years^[5], but important bottlenecks remain. The Caspian Sea crossing, limited capacity and interoperability, and customs and border procedures can increase costs and transit times. For bulk and processed mineral products, where margins can be sensitive to transport costs and reliability, such constraints can affect the commercial viability of projects and weaken the attractiveness of Central Asian supply relative to established routes and suppliers.

Connectivity should therefore be treated as part of the CRM strategy rather than as a separate infrastructure agenda. Investment in the Middle Corridor needs to keep pace with investment in extraction and processing capacity. Otherwise, the EU could succeed in developing alternative sources of supply without creating a sufficiently reliable route through which those materials can reach European industry.

4.3. Risks for Business Stakeholders

Beyond the EU and its Central Asian partners, a wider set of business stakeholders carry their own exposure. They include project financiers, European and third-country companies, multilateral platforms, and downstream industries.

Corporate and joint-venture risk: Companies already committed on the ground face standard project risks, including regulatory change, state-owned enterprise partnership dynamics, financing timelines, that are compounded by the region’s governance and data gaps, and by uncertainty over whether EU-level frameworks will materialise into the offtake guarantees and connectivity investment their business cases assume. Kyrgyzstan’s 2021–22 nationalisation of the Canadian-run Kumtor mine shows how quickly a host government can turn a final project status into a contested one.

Third-country and multilateral risk: Platforms such as the G7’s non-binding Critical Minerals Resilience and Production Alliance, and parallel efforts like South Korea’s battery-sector diversification talks, depend on coordinated action among like-minded partners. Fragmented or duplicative engagement (the EU, US, G7, and individual member states each running separate tracks in the same markets) risks diluting collective leverage vis-à-vis China and leaving Central Asian counterparts uncertain as to which commitments are most credible.

Downstream industry risk: European battery, defence and industrial manufacturers counting on greater CRM supply security face a timing risk: Central Asian resources will not contribute meaningfully to EU value chains until sufficient midstream capacity is in place, a great challenge in principle and a process likely to take several years – if ever realizable. As a result, Central Asia’s contribution to diversification may materialise only after the CRMA’s 2030 benchmarks come into effect.

 

5. The Coordination Challenge

The effectiveness of the EU-Central Asia CRM partnership will depend on how well the different actors involved coordinate their efforts. The landscape is increasingly crowded: EU institutions, Member States, European companies and financial institutions are pursuing projects alongside the United States, China, Japan, South Korea and multilateral platforms such as the G7. This creates opportunities for complementary investment and expertise, but also a risk of fragmented or duplicative engagement.

Within Europe, much commercial activity is being driven by Member States and individual companies rather than through EU-level instruments. This can provide flexibility and allow bilateral relationships to move quickly, but without stronger coordination may also produce competing approaches to the same partners and projects. A more coherent European offer would allow EU institutions to combine their strengths in regulation, standards and technical assistance with the industrial capabilities and commercial relationships of Member States and European companies.

Coordination with external partners is equally important. The EU and the US share an interest in reducing exposure to Chinese processing and could use existing G7 and bilateral channels to align investment, standards, recycling and supply-chain resilience efforts. Cooperation with Japan and South Korea, particularly in downstream and battery sectors, could similarly complement rather than substitute for Central Asian supply.

For downstream European industries, the principal concern is timing. Battery, defence and industrial manufacturers require predictable volumes, quality standards, competitive prices and reliable delivery, not political commitments alone. Central Asian resources will contribute meaningfully to European supply chains only once extraction, processing, transport and offtake arrangements are in place. Coordination is therefore needed across the entire chain, from EU institutions and Member States to companies and downstream users.

 

6. Recommendations for EU Action

With political frameworks, financing instruments and the first Strategic Projects now in place, the EU is well positioned to move to delivery. Six priorities should guide the next phase.

1. Prioritise midstream and value-addition investment. EU support should extend beyond extraction to processing capacity both within the EU and, critically, co-located in Central Asia. This would avoid an extraction-only model and reduce the risk that newly secured resources simply feed Chinese processing chains. Uzbekistan’s Technological Metals Complex, Kazakhstan’s proposed offtake-based cooperation model and the Regional Rare Earth Research Centre provide potential starting points.
2. Accelerate the Strategic Projects pipeline. The EU should use DG GROW CRM technical assistance and existing financing instruments to move beyond Kazakhstan’s Sarytogan graphite deposit and convert promising projects into bankable investments at a pace competitive with other external partners. Financing should be linked more systematically to feasibility, offtake and financial-close milestones.
3. Make the Middle Corridor part of the CRM strategy. Investment in the Trans-Caspian route should focus particularly on the Caspian crossing, capacity and customs procedures, ensuring that new production and processing capacity can reach European markets reliably and competitively. Connectivity should be developed in parallel with CRM projects rather than treated as a separate infrastructure agenda.
4. Strengthen the enabling conditions for investment. The EU should expand support for geological data modernisation, resource governance and project preparation through initiatives such as DATA4CRM and SECURECRM to reduce project-preparation risks for investors and financiers. These relatively targeted interventions can reduce exploration and due-diligence costs and help move projects from geological potential towards bankability.
5. Coordinate the European and wider allied response as already initiated. EU institutions, Member States, European companies and financial institutions should present a more coherent offer to Central Asian partners, combining European industrial capabilities, financing, standards and market access. The EU should also use G7 platforms and explore a dedicated EU-US channel to coordinate where interests overlap, particularly on processing, recycling and supply-chain resilience. Cooperation with Japan and South Korea, including in downstream and battery sectors, should complement rather than substitute for Central Asian supply.
6. Build resilience beyond new production. Given continued uncertainty around Chinese export controls, the EU should accelerate and scale up its existing stockpiling initiatives, including the coordinated EU-wide stockpiling pilot under RESourceEU and the planned European Critical Raw Materials Centre. These measures should serve as a hedge while new extraction and processing capacity is developed and qualified.

The strategic test is no longer whether the EU can establish a credible partnership framework with Central Asia: that framework exists. It is whether Brussels can translate it into financed projects, regional processing capacity and reliable routes to European markets quickly enough to secure meaningful diversification and resilient EU–Central Asian value chains that reduce exposure to Chinese processing.

[1] Supposedly, in response to US tariffs, and citing national security interests as a reason, China introduced two waves of export controls for rare-earth elements. Since April 2025 exporters are required to obtain licenses and need to provide information on the end-users. The October 2025 measure obliges foreign firms to obtain approval to export magnets containing even traces of rare earth elements from China. (European Parliamentary Research Service, 2025)

[2] This policy has been used as pressure against Japan: In January 2026, China tightened restrictions on exports of dual-use items to Japan following Prime Minister Sanae Takaichi’s November 2025 remarks that a Chinese attack on Taiwan could constitute an existential threat to Japan. Subsequently, Beijing placed 20 Japanese entities, including subsidiaries of Mitsubishi Heavy Industries and Kawasaki Heavy Industries, on a restricted export-control list and another 20 on a watch list. The measures cover dual-use goods, including rare-earth materials and related products, and have coincided with a sharp reduction in Japanese access to Chinese heavy rare earths. (Center for Strategic and International Studies (CSIS), 2026)

[3] Five Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan) plus the US

[4] After acquiring its first stake in Sarytogan Graphite Ltd. in 2024, EBRD increased its stake in 2026 (European Bank for Reconstruction and Development, 2026)

[5] Approx. fivefold in seven years