German company plans to pour $700 million into lithium production in Kazakhstan

German HMS Bergbau AG is planning to put $700 million in lithium production in Kazakhstan once it obtains full control over a local company that runs two lithium fields, according to Minister of Industry and Infrastructural Development Marat Karabayev.

«German public company Bergbau has bought 51% of shares of a Kazakhstani business. The German company is now its major stakeholder… They run lithium fields in the eastern part of the country. The exploration work is already done and now we are talking about production,» he told journalists.

As the official noted, a Kazakhstani company will benefit from cooperation with a European company in terms of expertise. However, more sophisticated production of lithium batteries will depend on the capacity of these fields that Bergbau currently controls.

«Lithium batteries for electric cars is the second stage. Of course, it’s too early to talk about batteries because before we start production, we have to evaluate the capacity of those lithium fields in the first place,» Karabayev underlined.

According to the minister, Bergbau is the first company from Germany that is going to produce rare metals in Kazakhstan. In contrast, Chinese companies have been working in this sector in Kazakhstan for a long time.

«The German company will run two lithium fields in the East Kazakhstan region. The amount of investments is expected at $700 million. German geologists have already worked there,» Karabayev said.

He also mentioned that Kazakhstani companies are supplying a range of critical materials to the EU, including titanium.

In regard to Chinese companies which operate in Kazakhstan, Karabayev described them as highly competitive. Chinese companies process more than 70% of all rare metals produced in the world. Some businesses from Canada and South Korea are also showing interest in rare metals in Kazakhstan.

Given such a strong interest in the sector, the country is going to sell rare metal fields as expensive as possible, Karabayev highlighted.

«What we really want is the best offer. Some types of rare metal fields will be sold through auctions. Anyone can take part in such auctions online. The highest bid wins, although, of course, we also want a winner to launch a local production. This is very important,» he said.

He noted that all new projects in the field of rare metals and critical materials must meet the UN standards. Kazakhstan has already negotiated with the UN on the issue. These international requirements are going to complement the existing Kazakhstani rules.

The minister noted that 40 European companies have shown their interest in critical materials from Kazakhstan.

On June 21, Kazakhstani Creada Corporation and German HMS Bergbau AG agreed to cooperate in the spheres of exploring, producing and processing rare metals in the East Kazakhstan region. Rare metals are crucial elements for high-tech products such as electronics, magnets, batteries and other innovative goods. The preliminary cost of the project is $200 million. As of July 4, Creada Corporation is controlled by another entity, KAZ Lithium LTD. Although this company is registered at the Astana International Financial Center, its final beneficiaries are unknown.