The global energy transition is creating a new form of resource dependency risk for mineral-rich developing countries — one that mirrors the classic extractive trap of the 20th century but operates under a green technological banner. A detailed comparative analysis of Kazakhstan and Uzbekistan argues that unless these countries can move beyond raw material extraction into the refining, smelting and separation stages of the critical minerals value chain, they risk becoming peripheral suppliers to a decarbonised global economy rather than industrial beneficiaries of it.
The paper’s central concept is the “green resource curse” — an extension of classic resource curse theory to the minerals powering electric vehicles, wind turbines and solar panels. While mining for lithium, cobalt, rare earth elements and battery metals is geographically dispersed across multiple continents, processing and refining capacity is extraordinarily concentrated. Between 60% and 90% of refining capacity for most key transition minerals sits in a single country or region — primarily China — creating what the authors describe as an hourglass-shaped supply chain in which global resource flows converge at a handful of strategic bottlenecks. Resource-rich countries bear the environmental costs of extraction while remaining excluded from the high-value industrial segments where technological learning and economic returns accumulate.
Kazakhstan and Uzbekistan represent the most instructive cases in the emerging “third zone” of critical minerals geopolitics — countries with broad mineral portfolios and growing state-led industrial strategies that are simultaneously being courted by China, the United States, the EU, Japan and South Korea. Kazakhstan holds the world’s third-largest rare earth reserves, produces 19 of the EU’s 34 critical raw materials, and is the world’s largest uranium producer. Uzbekistan holds significant reserves of tungsten, lithium, copper and rare earths, and has launched a $2.6 billion three-year investment programme across 76 mineral projects.
Yet both face the same structural bottleneck: the midstream. Kazakhstan’s SARECO joint venture — established between Kazatomprom and Japan’s Sumitomo to produce rare earth oxides at Stepnogorsk — has struggled to move beyond mixed rare earth extraction due to the precision demands of individual element separation. The technological difficulty of high-purity rare earth refining, particularly for heavy rare earth elements essential to permanent magnets, exceeds what can be resolved through capital investment alone. A significant share of Kazakhstan’s rare earth ores continues to be exported for processing abroad, primarily to China, which controls approximately 90% of global rare earth processing capacity.
China’s investment model — illustrated by the $300 million tungsten processing plant led by Chinese capital in Almaty Province — offers speed and scale but carries the risk of integrating Central Asian industrial capacity into Chinese supply chain networks rather than building domestic technological sovereignty. As Western regulatory frameworks including the US Inflation Reduction Act and the EU Critical Raw Materials Act increasingly scrutinise supply chain origin and ownership, Central Asian projects deeply embedded in Chinese capital may face market access constraints that negate the industrial gains achieved.
Western engagement offers regulatory alignment and ESG compliance but, the analysis argues, insufficiently addresses the technological dimension of midstream sovereignty. Financial de-risking mechanisms do not automatically generate domestic process engineering capability or separation expertise.
South Korea emerges as offering a potentially distinctive model — what the paper terms a “process-embedded industrial partnership.” Unlike capital-dominant Chinese integration or compliance-driven Western frameworks, the Korean approach emphasises the transfer of operational know-how, pilot plant design, high-purity separation techniques and workforce training alongside physical investment. The Uzbekistan-Korea Rare Metals Centre, combining geological analysis with separation technology design and applied research collaboration, exemplifies this model. Japan, meanwhile, has pledged ¥3 trillion ($19 billion) in Central Asian business investment over five years and brings what the paper describes as “technological depth and long-term institutional strength.”
The paper identifies four conditions that must be met to escape the green resource curse: internalising midstream processing and separation technologies that generate learning effects; reducing the carbon intensity of refining to preserve access to emerging carbon border adjustment regimes; diversifying external partnerships to avoid single-bloc dependency; and sustaining institutional learning through workforce development and domestic research capacity. Where these conditions are absent, mineral wealth risks reproducing volatility, dependency and unequal value capture — even within a decarbonised economy.
