Kazakhstan’s Tungsten Reserves Put the Country at the Heart of a New U.S. Resource Strategy

The discovery and potential development of Kazakhstan’s vast tungsten deposits have positioned the country at the forefront of a new chapter in global resource diplomacy. According to Bloomberg (October 2025), the Trump administration has backed negotiations for a major U.S. investment in Kazakhstan’s tungsten sector. It will become a separate topic in the run-up to the U.S.–Central Asia Summit on November 6 in Washington.

The initiative is led by Commerce Secretary Howard Lutnick and the American firm Cove Kaz Group Capital LLC, working in partnership with Kazakhstan’s sovereign wealth fund Samruk-Kazyna. Cove Kaz Group Capital LLC serves as the main U.S. vehicle for this venture, which aims to develop two of the world’s largest untapped tungsten deposits — Upper Kairaktinskoye and North Katpar.

The company is a portfolio enterprise of the international investment firm Cove Capital LLC (established in 2015, with offices in New York and Melbourne) and is reportedly majority-owned by U.S. private equity investors experienced in critical minerals and frontier-market mining projects. While full, publicly disclosed shareholder details are limited, the structure suggests U.S. private investors hold the controlling stake, with the Kazakh sovereign partner maintaining a profit-sharing position.

In Kazakhstan, the business also holds stakes in subsidiaries such as Kaz Critical Minerals LLP (through Kaz Resources LLC), indicating a layered investment framework. Its proposed role in the tungsten project includes project operations, infrastructure development, and establishing export routes that integrate Kazakhstan’s tungsten into U.S. and allied supply chains for defense, aerospace, and advanced manufacturing.

Supported politically by Washington but without direct U.S. government equity participation, the project exemplifies a broader model of American “resource diplomacy” that leverages private investment partnerships to secure critical minerals and reduce reliance on China’s supply dominance.

The map shows China and the United States competing for control over Kazakhstan’s major tungsten deposits, highlighting two key sites near Karaganda — Verkhnеe Kayraktinskoye and Severnyy Katpar. It illustrates how strategic mineral resources are becoming a focal point of U.S.–China rivalry in Central Asia.

Main Competitor: China

The main competitor is the Chinese state-owned company Xiamen Tungsten, which is willing to pay above-market prices to strengthen its control over the global tungsten market (China currently controls about 80% of it). The United States may support the project through loans from its state banks but does not seek an equity stake in the enterprise.

Chinese state companies like Xiamen Tungsten can offer Kazakhstan prices above the global average and invest rapidly, which makes their bids highly attractive for resource holders. Beyond just mining, China is investing in local processing facilities, such as a $300 million tungsten plant commissioned in Almaty region in 2024 by Jiaxin International Resources Investment Ltd.

It will process 3.3 million tons of ore annually and eventually produce high-purity tungsten carbide on site. This plant not only increases Kazakhstan’s export capacity but strengthens Chinese influence by anchoring the entire processing chain regionally

Kazakhstan’s Geological Advantage

Kazakhstan holds an exceptionally strong position in global tungsten geology. The country’s reserves are estimated at roughly 2 million tons of tungsten trioxide equivalent. According to data from the U.S. Geological Survey (USGS) and international industry sources, global reserves stand between 3.8 million and 4.4 million tons, which implies that Kazakhstan could possess as much as half of the world’s known deposits.

Historically, these deposits have remained largely undeveloped due to the high costs of extraction, a legacy of Soviet-era mine closures, and a lack of modern processing infrastructure. With the revival of interest from Western investors, these sites are now being repositioned as a cornerstone of Kazakhstan’s strategy to become a leading supplier of critical minerals beyond uranium and rare earths.

Strategic Significance for the United States

For the United States, access to these deposits has profound strategic significance. Tungsten is a dense, heat-resistant metal indispensable for defense applications ranging from armor-piercing munitions to jet-engine components and for high-tech manufacturing sectors such as semiconductors, renewable energy, and precision tools. The U.S. Geological Survey classifies tungsten as a critical mineral essential to national security and economic resilience.

Yet global tungsten production is overwhelmingly dominated by China. This near-monopoly poses a structural vulnerability for the United States and its allies, particularly as global supply chains are increasingly exposed to geopolitical risks and trade restrictions.

The proposed partnership with Kazakhstan is therefore not merely a commercial investment; it is a strategic move to diversify supply chains, mitigate dependence on China, and strengthen industrial resilience in key U.S. sectors.

Washington’S Shift Toward Business and Economic Diplomacy

The potential U.S.–Kazakhstan tungsten deal marks a new phase in Washington’s engagement with Central Asia. For decades, U.S. policy in the region focused on security, counter-terrorism, and energy cooperation, with limited attention to the mining and industrial base.

By investing in Kazakhstan’s critical minerals, Washington is signaling an expanded economic strategy that aligns with its global critical-minerals initiative and the broader competition with Beijing for access to strategic resources.

What is at stake for Kazakhstan

For Kazakhstan, this partnership represents both an opportunity and a diplomatic balancing act. It provides access to Western capital, technology, and environmental standards while reinforcing the country’s policy of multi-vector diplomacy.

The collaboration could strengthen Astana’s leverage vis-à-vis China and Russia, allowing it to diversify its external economic partnerships and reduce overreliance on any single market or transit corridor.

Trade Policy and Diplomatic Implications

The proposed tungsten partnership between Cove Kaz Group Capital LLC and Kazakhstan could also serve as a catalyst for advancing Astana’s long-standing effort to lift the Jackson-Vanik trade restrictions and obtain permanent normal trade relations (PNTR) status with the United States.

If the project moves from negotiation to implementation and aligns with wider U.S. policy goals on governance and trade liberalization, it could demonstrate the maturity of bilateral economic relations and underscore Kazakhstan’s value as a reliable partner in diversifying global supply chains.

A successful, high-profile U.S. investment in Kazakhstan’s critical-minerals sector would give both sides a practical incentive to expand market access, remove legacy restrictions, and formalize a more stable trade framework that supports long-term strategic collaboration.

Risks and Structural Challenges

U.S. foreign direct investment in Kazakhstan already provides a foundation for this expanding relationship, with cumulative investments exceeding $60 billion by 2024. Most U.S. capital has traditionally been concentrated in the energy sector, led by Chevron and ExxonMobil.

However, investment in mining and critical minerals remains limited, reflecting both the complexity of Kazakhstan’s regulatory regime and the high-capital requirements of extractive projects. The tungsten initiative would therefore represent diversification from hydrocarbons toward the broader raw-materials base.

Yet the risks are substantial. Kazakhstan’s legal framework, while reformed, remains vulnerable to inconsistent enforcement, opaque decision-making, and periodic revisions to subsoil, tax, and investment legislation. The corporate governance environment continues to face systemic weaknesses, including limited transparency of ownership structures and weak enforcement of minority shareholder rights.

Investors must also contend with currency volatility, local-content requirements, and potential exposure to secondary sanctions arising from Kazakhstan’s close trade and financial ties with Russia. These factors create uncertainty over contract enforcement, profit repatriation, and dispute resolution, underscoring the need for robust guarantees and transparent concession regimes.

Industrial and Economic Impact

The involvement of a U.S. operator, coupled with potential financial backing from institutions such as the International Development Finance Corporation or the U.S. Export-Import Bank, could inject much-needed expertise into Kazakhstan’s mining and processing sector.

Beyond direct investment, the project could catalyze industrial modernization by promoting value-added processing, technology transfer, and infrastructure development. If properly managed, it could transform Kazakhstan from a mere exporter of raw materials into a higher-value participant in the global tungsten supply chain.

For the United States, securing such a supply base in a friendly and stable jurisdiction would enhance industrial security and reduce vulnerability to Chinese dominance in refining and downstream processing.

Geopolitical and Logistical Constraints

Kazakhstan is a landlocked country dependent on trans-Caspian and overland routes for mineral exports. Establishing efficient supply chains from central Kazakhstan’s mines to Western markets will require significant investment in transport infrastructure and possibly the construction of domestic processing facilities.

At the same time, Chinese firms already have a strong foothold in Kazakhstan’s tungsten and rare-metal sectors, having established joint processing ventures and secured offtake agreements. Any U.S. entry into this market is likely to trigger competitive responses from Beijing, which may leverage its financial capacity and established logistics to retain dominance.

For Washington, sustaining a credible alternative supply chain will require not only initial investment but also enduring policy and diplomatic commitment.

According to data from the International Trade Centre, China has become the dominant importer of rare earth metals from Kazakhstan in recent years. However, the EU and Japan were also important partners of Kazakhstan in this area.

Long-Term Horizon

Mining projects have long development cycles. From feasibility studies to full-scale production, tungsten mines can take a decade or more to become operational. Even if a final investment decision were reached within a year, meaningful output would not likely materialize before the mid-2030s.

This means that while the deal fits into Washington’s broader diversification goals, it cannot immediately offset dependence on Chinese tungsten supply. Short-term resilience will still rely on recycling, substitution, and stockpiles, while Kazakhstan’s contribution will emerge as part of a long-term rebalancing strategy.

Ensuring Lasting Benefits for Kazakhstan

For Kazakhstan, turning its tungsten reserves into a long-term strategic asset will depend on how well the country reforms its mining governance and maximizes domestic value creation. Continued progress toward full transparency in licensing, contract disclosure, and revenue management is essential to attract responsible investors and align the sector with international Environmental, Social, and Governance (ESG) standards. A predictable regulatory environment, anchored in clear concession rules and impartial enforcement, would strengthen investor confidence and reduce the perception of political risk.

Equally important is the localization of the value chain. Establishing domestic processing facilities, promoting technology transfer, and expanding local manufacturing of intermediate tungsten products would help Kazakhstan move beyond raw-material exports. This approach can be reinforced through public-private partnerships that connect foreign capital with local expertise and academic institutions.

Sustainable development of the tungsten sector also requires strict environmental safeguards and skills development for the local workforce. Modern environmental regulations, rehabilitation obligations, and community benefit programs can ensure that mining growth supports long-term ecological stability and social welfare. Targeted vocational training and university partnerships could create a generation of engineers, metallurgists, and technicians capable of driving the industry forward.

If these reforms advance in tandem with strategic investment, Kazakhstan will not only diversify its economy but also secure a durable position in the global critical-minerals ecosystem, anchored in transparency, sustainability, and national value creation.

Outlook

Despite the risks, the prospective U.S.–Kazakhstan tungsten partnership is strategically consequential. It symbolizes a shift in U.S. foreign-economic engagement from reactive aid and security assistance toward proactive industrial diplomacy.

It also underscores Kazakhstan’s emergence as a pivotal player in global critical-mineral supply chains. By tapping its massive tungsten reserves, Kazakhstan can reinforce its position as one of the world’s leading sources of strategic materials, complementing its strengths in uranium, copper, and rare metals.

For Washington, supporting this venture not only diversifies a key industrial input but also deepens its geopolitical presence in a region traditionally dominated by Moscow and Beijing. The success of this partnership will depend on maintaining regulatory stability, transparent concession terms, and alignment of investor and state interests.

Mineral security is now inseparable from foreign policy: critical-mineral access is not only about resource extraction but also about building alliances, shaping standards, and ensuring long-term economic resilience.