Green energy and rare earth elements - the strategic axis of Baku–Beijing–Central Asia

During his speech at the international forum "Towards a New World Order" held on April 9 at the Azerbaijan Diplomatic Academy, Azerbaijani President Ilham Aliyev emphasized the development of green energy, specifically in Azerbaijan, as well as in the regions of the South Caucasus and Central Asia in general. Having significant potential in the field of green energy allows Azerbaijan to become an exporter of it and integrate into the regional system as part of forming a "green energy corridor" with neighboring countries. After all, as Ilham Aliyev once again emphasized, “Azerbaijan has developed over the centuries, being at the same time part of Eastern and Western geography”. If we add to this the rich reserves of rare earth metals (REM) or rare earth elements (REE) in Central Asia, which are indispensable for green energy production, and, most importantly, active cooperation with China, which has extensive experience and capabilities both in green energy and in the extraction and processing of rare earth metals, we get quite a coherent picture. In this way, the South Caucasus-Central Asia region can secure a strong place in the global supply chain, which promises tremendous economic development for all the countries involved.
Azerbaijan's role as a crossroads between East and West is reflected, on the one hand, in strong, traditional ties with its neighbors along the Caspian Sea and south of Azerbaijan, with the countries of the Middle East, and, on the other hand, in long-term cooperation with European countries. Baku is linked to Beijing by the Declaration on Strategic Partnership adopted last year, and the Asian Infrastructure Investment Bank is also listed among Azerbaijan's key partners. Baku highly appreciates the "One Belt, One Road" initiative and is doing everything possible to develop the Middle Corridor. In particular, the head of Azerbaijan stressed the growing number of goods passing through Azerbaijan, “not only from Central Asia but also from China and from Europe to China”.
As for green energy, an important agreement was signed six months ago between Azerbaijan, Kazakhstan and Uzbekistan on a green energy cable under the Caspian Sea. " So, it will bring the vast green energy resources of Central Asia – some of which are already available and some in the process – adding to the vast green energy resources of Azerbaijan to support European countries with respect to energy security. So far, it is oil and gas, but it will be electricity generated from green energy," the President of Azerbaijan noted.
Ilham Aliyev also noted the active work with Chinese companies: " We invited them to be our strategic partners in different areas, including the green energy. I would name that their companies have been selected as our partners in the manufacturing of green public transportation vehicles. The first production is expected this year, and they are also suppliers of solar panels, which are being installed in Azerbaijan with the investments from other countries. Also we are in the phase of negotiations with some Chinese companies with respect to direct investments in green energy."
China is also a key partner for the development of green energy because it has long been the undisputed world leader in both reserves and production of REE and REM. This is about 60% of global production and almost 85-90% of global processing and supplies. As you know, REM or REE serves as the basis for the production of many high-tech products: electronics (computers, smartphones, etc.), solar panels, wind turbines. Actually, most REM are not literally rare, but rather rarely found in concentrated quantities large enough to make their extraction and refining profitable. In other words, the extraction and processing of REM requires complex and expensive technologies, and Beijing has them. At the same time, back in 2004, China used less than half of its rare earth metals, but now it is already making high-tech end products, on which many large economies depend. Beijing is not only developing its own deposits, but is also actively interested in them in neighboring countries. This includes Central Asia, which is known to have large reserves of various rare earth metals. These fields have not been developed much, partly due to a lack of investment, and Beijing has already gained leadership positions in this area, especially in Kyrgyzstan and Tajikistan.
The world's demand for green energy and technologies for its generation, storage and use is growing at a tremendous pace. The International Energy Agency predicts that the growing adoption of clean energy technologies is expected to quadruple the demand for REE and RM by 2040. Thus, the South Caucasus-Central Asia region has all the components to occupy key positions in what is linked to the future development of mankind. These are resources for the development of green energy in Azerbaijan and Central Asian countries, Central Asian reserves of REM, Chinese opportunities in the field of extraction, processing of REM and manufacturing of end products - microchips and equipment - for green energy, as well as interest from end purchasers and investors. And most importantly, the logistical capabilities that are also in the hands of regional countries. I would also like to add Azerbaijan's confident position, its initiatives to introduce more environmentally friendly, sustainable and inclusive approaches, and to preserve the environment. This is evidenced, for example, by the successful holding in Baku of the 29th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29).
Of course, there are pitfalls in the development of renewable energy. Like, for example, the fact that the extraction of REM by itself is still not too environmentally friendly. But this is a process that needs to be gone through, because it provides a real chance for the impact on the environment to be minimized in the end. And then, mining and processing technologies also do not remain the same, and therefore the search for more ecological methods and approaches in this area can be considered a good incentive to support and develop scientific potential, and already gain leadership positions here. Another important point is the inevitable intensification of geopolitical rivalry in the region. On the other hand, with the right approach, it can also be a chance rather than a disadvantage.
Irina Khalturina

SR-CENTER.INFO