The Minerals Are Not the Money

Central Asia is increasingly described as the next great answer to the world’s critical-minerals problem.

The geological case is impressive.

The region holds an estimated 39% of global manganese ore reserves, 31% of chromium, 20% of lead, 13% of zinc, 9% of titanium and about 5% each of copper, cobalt and molybdenum. Kazakhstan is the world’s largest uranium producer and can export 21 of the 34 minerals on the European Union’s critical list. Kyrgyzstan and Tajikistan hold major antimony reserves. Uzbekistan has the world’s eleventh-largest copper reserves and is developing lithium and molybdenum.

Europe wants diversification. China wants secure industrial supply. The United States wants alternatives to Chinese processing. Russia wants to preserve influence across its former economic space. Central Asian governments want investment, technology and geopolitical room to manoeuvre.

It appears to be the perfect alignment.

But geology is not development.

A country can possess strategic minerals and still capture only a small fraction of the value. The decisive assets may be located elsewhere: geological data, project finance, processing technology, transport corridors, power supply, trading networks, intellectual property, offtake contracts and the legal structures through which profits are taxed.

That is the deeper message of the OECD’s new regional report on critical minerals in Central Asia.

The world is not simply competing for ore.

It is competing to decide who finances the mine, who controls the route, who refines the material, who owns the customer relationship and where the taxable profit finally appears.

The endowment is real

Central Asia’s mineral potential is not a marketing invention.

Kazakhstan has more than 200 mineral-production sites, and 38 new deposits were reported in 2025. It holds the world’s largest chromium reserves, the seventh-largest zinc reserves and the eighth-largest lead reserves. It also has significant copper, cadmium, bauxite and rare-earth resources.

The country already operates parts of the midstream chain. It processes lead, zinc and copper, has an established titanium industry and produces tantalum, beryllium and niobium at the Ulba plant. Kazakhstan produced more than 21,000 tonnes of uranium in 2022, approximately 40% of global output according to figures cited by the OECD. Metals mining accounted for 12.1% of its GDP in 2024.

Uzbekistan combines large copper reserves with gold, uranium, silver, molybdenum, selenium and lithium. It is the fifth-largest uranium supplier globally, while its large state-linked companies already possess copper and gold processing capacity.

Kyrgyzstan holds about 13% of global antimony reserves according to the sources used in the OECD report. Gold remains central to its economy, but antimony has acquired new strategic importance as Chinese export restrictions change the market.

Tajikistan holds the world’s second-largest antimony reserves and already has a position in niche production. It also possesses zinc, aluminium, copper, lead and silver.

Turkmenistan is the least documented case. Its non-hydrocarbon mining sector remains underdeveloped, and insufficient exploration makes claims about lithium, copper and iron difficult to verify.

The regional picture is therefore uneven. Kazakhstan is not Tajikistan. Uranium is not lithium. A measured reserve is not the same as a resource estimate. An operating refinery is not the same as a project announced in a memorandum.

The first analytical discipline is to refuse to treat Central Asia as a single mine.

The difference between rock and revenue

The value chain can be divided into at least seven layers:

1. geological information and exploration;

2. licensing and project rights;

3. mine development and extraction;

4. concentration and initial processing;

5. refining and chemical conversion;

6. component and industrial manufacturing;

7. financing, trading, logistics and end-customer contracts.

The country containing the deposit does not automatically control the other six layers.

This distinction explains why mineral wealth can coexist with limited fiscal revenue, weak productivity and commodity dependence.

Extraction is capital intensive. It can generate exports without generating many jobs. A mine can be profitable while the state loses revenue through tax holidays, inflated related-party interest payments, underpriced sales to affiliates or the offshore sale of the company that owns the licence.

The OECD identifies three specific base-erosion and profit-shifting risks for the region: underpricing of mineral sales, abusive financing structures and offshore indirect transfers of mining licences.

These are not technical footnotes. They determine whether strategic geology becomes public wealth.

Underpricing: the invisible transfer

Suppose a local mining company sells concentrate to an affiliated trading company at a price below the market value. The trader then resells it internationally at the higher price.

The physical commodity leaves the producing country. Part of the profit leaves through the invoice.

The mine may report low taxable income. The trading affiliate captures the margin in a jurisdiction with lower taxes, better financing or more favourable disclosure rules.

The challenge becomes greater when the mineral is not traded on a transparent exchange, when quality varies or when the sale is bundled with processing, transport and financing.

The state can own the resource and still fail to observe the true price.

This is why tax administration, transfer-pricing expertise and access to comparable transactions are strategic infrastructure. A geological survey tells a government what is underground. A capable revenue authority tells it how much value is leaving.

Debt can move the profit before the ore moves

Mining projects require large initial investment and long periods before production. Debt is therefore essential.

It can also become a channel for profit shifting.

An overseas affiliate lends to the local project at an excessive interest rate. Interest payments reduce taxable income in the producing country and transfer cash to the financing entity. Management fees, guarantees and intellectual-property charges can perform a similar function.

The policy answer is not to reject foreign finance. Without it, many projects will never be developed.

The answer is to distinguish real financing cost from a structure designed to extract the tax base. That requires thin-capitalisation rules, limits on interest deductions, beneficial-ownership disclosure and tax authorities able to examine complex group accounts.

The most valuable mining skill may sometimes be accounting.

The licence can be sold offshore

A foreign investor may own a local mining licence through a chain of holding companies. If the overseas holding company is sold, economic control of the mineral project changes hands even though the local licence itself is not formally transferred.

Without appropriate tax rules, the producing country may receive little or no tax from the capital gain.

This is the third OECD risk: offshore indirect transfers.

For governments seeking investment, the temptation is to make entry easy and ask difficult questions later. But the largest transfer of value can occur before commercial production begins, when an early investor sells a de-risked project to a larger operator.

A fiscal system designed only around royalties on future production can miss the value created by the licence itself.

Central Asia’s second problem: data

Investors cannot finance what they cannot evaluate.

Much of the region’s geological knowledge was inherited from the Soviet period. Reporting systems are often outdated, datasets remain inaccessible and classifications may not correspond to the standards used by international investors and lenders.

This produces an unusual situation: countries may be mineral rich but information poor.

Poor data increase uncertainty. Uncertainty raises the cost of capital. A higher cost of capital reduces the price investors are willing to pay for a licence and increases the return they demand from the state.

Modern geological mapping is therefore not a secondary administrative project. It changes the bargaining power of the government.

Kazakhstan has been digitalising geological information and working with international geological institutions. Regional initiatives supported by Europe also aim to harmonise data and resource classification.

The critical issue is public access. If only a small group of officials, state companies and connected investors can see the best geological information, digitalisation may improve efficiency without improving competition.

Transparent data can attract more bidders. More credible bidders can improve contract terms. Better terms can raise public value before the first tonne is extracted.

China’s advantage is not simply capital

China is often described as a buyer of Central Asian resources. That understates its position.

Chinese companies invest in mines, processing plants, infrastructure and customer relationships. They can connect a deposit to an existing industrial ecosystem that includes equipment, engineering, refining, manufacturing and final demand.

That integration reduces execution risk.

In Kazakhstan, Chinese actors are involved in copper, gold, silver and tungsten processing. In Uzbekistan, Chinese investment includes mining and processing projects designed to produce concentrate and refined copper. Regional trade in metals remains heavily oriented towards China, Russia and Türkiye.

China’s strongest advantage is therefore not the size of a cheque. It is the ability to offer a chain.

Western institutions often offer separate pieces: a geological study, a development loan, an environmental standard, an export-credit facility and a future offtake discussion. China can sometimes connect those pieces more quickly.

The Western response should not be to lower governance standards. It should be to reduce fragmentation between finance, infrastructure and industrial demand.

Russia’s role is deeper than new investment flows

Russia’s influence cannot be measured only by the number of newly announced mining projects.

The region’s railways, technical standards, industrial relationships, language networks and historic supply chains were built within a common Soviet system. Some minerals and concentrates still move through Russian routes or depend on Russian processing and commercial relationships.

This legacy creates both convenience and concentration risk.

Sanctions, border disruption or political tension can affect a project whose mine is located far from Russia. A buyer may want the mineral but remain unwilling to finance a project that lacks an alternative transport corridor.

Central Asia’s mineral strategy is therefore also a logistics strategy.

The Trans-Caspian route towards Europe, routes through China and connections southward all change bargaining power. A second corridor is not merely an infrastructure asset. It is an option against geopolitical dependence.

Europe wants diversification but must decide what it will finance

The European Union has strategic partnerships and technical programmes across the region. It has supported geological data, environmental standards, project identification and feasibility work. Kazakhstan’s importance to Europe is already visible in uranium, titanium and other industrial inputs.

Europe’s problem is the distance between policy ambition and bankable projects.

A memorandum can identify a shared interest. It cannot remove ore-body risk, construct a railway, guarantee electricity, settle community claims or create an offtake price.

If Europe wants diversified supply, it must decide how much risk public institutions will absorb during exploration, feasibility and early construction. Private banks are rarely willing to finance geological uncertainty without strong sponsors, proven reserves and secure contracts.

The European policy dilemma is uncomfortable.

If governments refuse to support early-stage risk, supply diversification remains a slogan. If they support every strategic project, they may socialise losses from deposits that are technically weak or commercially uncompetitive.

The correct unit of analysis is the individual project, not the political category of “critical mineral”.

The United States brings strategic finance

US engagement has increasingly connected critical minerals to national security and industrial policy. American institutions can offer development finance, export credit, political-risk insurance and access to future industrial customers.

Potential US financing for Kazakh tungsten and cooperation agreements with Kazakhstan and Uzbekistan illustrate the shift.

Washington’s advantage is its ability to treat a relatively small mineral project as strategically important because of the much larger downstream industry it protects.

The IEA estimates that disruptions involving small volumes of critical minerals can threaten trillions of dollars in downstream production. In 2025, export controls exposed the vulnerability of automotive, defence, energy and technology supply chains. The economic value at risk is many times larger than the market value of the raw material.

This changes project economics. A mine that appears marginal under normal commodity pricing may have strategic insurance value.

But governments must make that subsidy explicit. Otherwise “national security” becomes a justification for opaque guarantees and weak projects.

Processing is not automatically development

The standard policy recommendation is that producer countries should move downstream.

The logic is understandable. Instead of exporting ore, process it locally. Instead of exporting concentrate, refine it. Capture more jobs, knowledge and tax revenue.

But local processing is not always economic.

Refining may require cheap and reliable electricity, large water supplies, specialised chemicals, skilled labour, environmental controls, scale and access to several feedstocks. A plant designed for one domestic mine may operate below capacity. The country may replace dependence on a foreign refiner with dependence on imported technology and subsidies.

The relevant question is not whether local value addition sounds desirable. It is whether the proposed stage of the chain has a durable comparative advantage.

Kazakhstan has a credible base in uranium, titanium, zinc, lead and selected specialty metals. Uzbekistan has growing copper and gold capability. These are foundations on which adjacent processing can be built.

For other minerals, the best strategy may be regional processing, long-term participation in overseas refining profits or contracts that guarantee technology transfer and domestic supplier development.

The worst outcome would be an expensive national refinery built for prestige, protected from competition and permanently dependent on public support.

The environmental constraint is economic

Mining debates often treat environmental and social standards as external conditions imposed by Western investors.

That interpretation is too narrow.

Water scarcity, tailings failures, pollution, worker safety and community opposition can stop production, increase financing costs and destroy political legitimacy. They are project risks with direct financial consequences.

Central Asia is particularly exposed to water stress and the legacy of Soviet mining waste. Tailings can be a liability, but they can also contain recoverable minerals. Reprocessing old waste may produce metals while reducing environmental risk, although the technical and economic feasibility must be evaluated site by site.

Community participation also affects the durability of contracts. A government can sign a long-term licence. It cannot guarantee that local consent will survive if the benefits appear to leave the region while the environmental cost remains.

The strongest projects will treat environmental data, water rights, labour standards and community revenue as part of the financing model from the beginning.

Country strategies should diverge

Kazakhstan: convert scale into bargaining power

Kazakhstan has the broadest mineral base, the most developed industrial capacity and the strongest ability to balance partners. Its opportunity is to use competition between China, Europe and the United States to improve terms, technology and market access.

Its risk is to announce too many projects, offer incentives too widely and preserve opaque relationships around strategic state and private companies.

Uzbekistan: combine reform with discipline

Uzbekistan is opening its mining framework and courting a wider group of partners. Copper, uranium, gold, lithium and molybdenum give it several paths.

Its opportunity is to connect mineral development with its broader manufacturing strategy. Its risk is that state-led investment, ambitious targets and foreign finance produce overcapacity or contingent public liabilities.

Kyrgyzstan: escape single-commodity dependence

Antimony provides a new strategic opening, but the country’s experience with gold shows the political risks of dependence on one major asset.

Its priority should be transparent licensing, stable rules, credible community benefit and diversification of buyers.

Tajikistan: use niche importance carefully

Antimony can create leverage because the market is small and concentrated. The same small market can also be volatile. A few projects can transform national export data while creating limited employment.

Tajikistan needs strong contract disclosure and fiscal safeguards because bargaining occurs with large foreign industrial groups.

Turkmenistan: establish facts before strategy

The most valuable first investment is exploration and credible data. Announcing a critical-minerals strategy before establishing commercially recoverable deposits would invite speculation rather than development.

Seven tests for genuine value capture

A critical-minerals agreement should be judged against seven questions.

1. Are reserves reported under internationally comparable standards?

2. Was the licence awarded through a transparent and competitive process?

3. Who finances the project, at what interest rate and with what state guarantee?

4. Is the offtake price linked to a transparent benchmark?

5. Which processing stage will occur locally, and is it commercially viable?

6. Where will profits be taxed, including gains from an offshore sale of the project?

7. What infrastructure, skills and domestic suppliers will remain after the deposit is depleted?

If these questions cannot be answered, the headline value of the mineral reserve tells us very little.

Three scenarios for the next decade

Scenario one: the extraction corridor

Foreign investors finance mines and basic concentration. Materials move to China, Russia, Europe or other processing hubs. Exports rise, but local industrial links remain weak. Governments collect some royalties while profit shifting and tax incentives reduce the fiscal gain.

This is the easiest scenario to implement and the least transformative.

Scenario two: the subsidy trap

Governments insist on national processing for every mineral. State companies borrow heavily, plants operate below capacity and electricity is subsidised. Commodity prices fall before the debt is repaid. The country captures more activity but destroys public value.

This is the most politically attractive scenario and potentially the most expensive.

Scenario three: selective industrialisation

Governments develop transparent geological data, auction projects competitively, choose processing stages where energy and skills provide an advantage, invest in shared corridors and negotiate offtake across several geopolitical partners. Tax administrations are strengthened alongside mining ministries.

This scenario is slower. It is also the only one likely to convert geology into durable productivity.

The contrarian conclusion

The world speaks about critical minerals as if the decisive fact were possession.

Possession is only the beginning.

The country that owns the deposit may not control the financing. The company that operates the mine may not control the refinery. The refinery may not control the component. And the company that controls the customer may capture the largest margin of all.

Central Asia has a genuine opportunity because several powers need what the region may be able to supply. Competition between them creates bargaining power.

But bargaining power exists only when governments possess reliable data, alternative routes, capable institutions and the ability to reject a bad project.

The real measure of sovereignty is not how many minerals appear on a geological map.

It is how much productive capacity, taxable income, technical knowledge and strategic flexibility remain in the country after the ore has left.

The minerals are real.

The money is not automatic.

Methodological note

The OECD report combines official information with external estimates that differ in date, classification and reliability. “Resources”, “reserves”, “production capacity” and actual output are not interchangeable. Some projects described in public announcements have not reached final investment decision. Regional reserve shares cited by the OECD rely in part on earlier secondary research and should be treated as indicative rather than a uniform geological audit. Geopolitical interpretations in this article are analytical inferences; project ownership, financing, offtake and tax structures require transaction-level verification.

Sources

● OECD — Critical minerals in Central Asia: A regional overview, 29 October 2026

● OECD — Executive summary

● OECD — Central Asia’s critical-minerals landscape

● OECD — Advancing security and transparency for the governance of critical raw materials in Central Asia, March 2026

● IEA — Global Critical Minerals Outlook 2026, executive summary

● European Commission — Critical Raw Materials in Central Asia

Roberto Balbino — CEO, Fintech SCB
International Finance & Banking Executive | Independent Analyst of Finance, Economics, Geopolitics & Global Markets
www.fintechscb.com