Uranium-rich Kazakhstan is fast becoming a strategic player among the Asian powers.
If you live in the West, you might be forgiven for overlooking Kazakhstan. Among the “stans”, it certainly draws less media attention than its southern neighbors, Afghanistan and Pakistan. In Asia, however, the massive country is gaining prominence. Bulging at the seams with supplies of natural energy sources, Kazakhstan is quickly becoming an important partner for the Asia’s growing powers.
Kazakhstan is a transcontinental country straddling Central Asia and Eastern Europe. With a territory greater than that of Western Europe, the country is geographically the largest of the former Soviet republics (excluding Russia) and boasts enormous fossil fuel reserves and abundant supplies of other minerals and metals, such as uranium, copper, and zinc.
In 2009, Kazakhstan outperformed Canada and Australia to become the world’s largest producer of uranium. The country aims to further expand its production to 25,000 tons by 2015 , and to become the main supplier to Russia, China and Japan.
Its role in the geopolitical energy game has increased thanks to strategic alliances and agreements, especially with Russia and China, two other major players in the energy market. Kazakhstan’s relationship with energy-hungry Japan is less clear because strong diplomatic common ground is lacking between the two countries.
Relations between Kazakhstan and Russia have improved because of Russia’s difficulty in extracting uranium from its own mines, which are mostly in inaccessible areas.
Three pipelines have strengthened cooperation: the Atyrau – Samara pipeline, which enables Kazakhstan to trade with the north via the Black Sea; the Gazprom – controlled Central Asia Center pipeline; and, finally, the Bukhara – Urals pipeline, which allows for the transport of gas from Uzbekistan to Russia via Kazakhstan.
Kazakhstan’s energy relationship with China is also deepening. Last February, at a meeting between Kazakh president Nursultan Nazarbayev and Chinese president Hu Jintao, the two countries agreed on a ten-year Kazakh supply to China of 55 thousand tons of uranium . This agreement adds to the growing Kazakh-Chinese bilateral trade, which reached US $20 billion last year, an increase of 45 percent from the previous year. Still, Nazarbayev said he was not fully satisfied with the current trade between the two countries and would like to expand it further. In the meantime, PetroChina, the largest Chinese producer and distributor of oil and gas, is developing cross-border projects that significantly involve Kazakhstan. For example, the second West-East pipeline from Kazakhstan/Uzbekistan to China, once completed, will supply China with up to 30 billion cubic meters of gas per year.
The importance of Kazakhstan as a main geopolitical actor in the energy market is likely to grow as a consequence Japan’s nuclear disaster at Fukushima in March 2011. Only 16 percent self-sufficient, Japan is the world’s largest importer of liquefied natural gas and the largest importer of oil. According to the U.S. Energy Information Administration, the earthquake in Fukushima provoked a 6,800 mega-watt shutdown of electricity-generating capacity at four different nuclear power plants. For the sake of its electricity bill, Japan is expected to look for even more natural gas and oil. Prior to the earthquake, Japan planned to use nuclear power to solve its electricity needs. This is the main reason for the development of Kazakhstan’s Kharasan-1 and Kharasan-2 uranium mine projects, which are expected to be producing 160 thousand tons of ore by 2050.
But in light of Japan’s reduced nuclear capabilities, how will Kazakhstan – rich in both natural resources and nuclear ambitions – react? The state uranium company, Kazatomprom, said that the Fukushima disaster would not noticeably affect company plans, but Kazakhstan might decide to cut and run: Kazakhstan has a real chance to play an important role in Europe. For Japan it would be easier to deepen the relations with Uzbekistan and Kyrgyzstan, both rich in oil and gas but less focused than Kazakhstan on uranium, rather than with the Kazakh government in Astana, the country’s capital.
Astana is now looking at Europe to gain market share and increase its gas-export profitability. Moreover, selling uranium to the European Union and to the United States would allow Kazakhstan to become an important supplier in the world energy market. Kazakhstan’s importance increased dramatically after the news of the country’s possible entrance into the World Trade Organization. Presiding over the Organization for Cooperation and Security in Europe gave the country the opportunity to “sit” together with the most important countries in the world, underlining once again its growing global relevance.
Kazakhstan has what it takes to become the main actor in the international energy market: Asia needs Kazakh energy reserves, Russia and China have deepened their relationships with Astana, and Japan’s current situation does not seem to be affecting Kazakhstan’s ambitions toward Europe and the United States.
Photo courtesy of The European Council via Flickr.