ANALYSIS - Rare-earth geopolitics and potential role of Türkiye

The writer is a Junior Research Fellow at the Caucasian Center for International Relations and Strategic Studies (QAFSAM).

ISTANBUL

In recent years, we have observed the growing importance of critical materials that play a key role in the manufacturing process of various technologies. In this context, rare earth materials are crucial to the long-term viability of cutting-edge technologies as they are essential in industries ranging from aviation to space exploration, defense to biomedicine.

West vs. China and Russia

The world's largest rare earth deposits are in China, and the world's fourth largest rare earth mineral reserves are in Russia. These two countries account for 57% of the world's known rare-earth material reserves. Notably, China plays a key role in the rare-earth industry. China accounted for 58% of world production and 85% of the world's refined rare earth in 2020. In light of Western countries' deteriorating relations with China and Russia, both countries may use these materials as a form of pressure against Western countries in the future. China's ban on rare-earth exports to Japan in 2010 and its announcement about restrictions on rare earth exports in December 2020 can be an example of this.

In recent years, western countries have tried to diversify their import and develop their rare-earth material reserves to reduce their dependence on China and Russia. Last month the UK, the US, and other western allies announced the creation of the Minerals Security Partnership, an initiative to make the supply chain more "secure". In the context of the diversification efforts, Türkiye's newly discovered massive reserve of rare-earth elements can play an essential role for western countries.

Türkiye discovered the second-largest reserve

Türkiye has discovered the world's second-largest rare earth element reserve in the Beylikova district of Eskişehir in Central Anatolia. The reserve is estimated to hold 694 million tons of reserves and is now second only to China, which has the largest rare element field with 800 million tons of reserves. State mining company Eti Maden announced that 1,200 tons of ore will be processed annually in the pilot plant at the first stage. This figure could reach 570,000 tons with a significant investment to be made in a larger industrial facility in the near future. Of the 17 known rare elements, ten can be produced in Türkiye.

Newly discovered rare-earth materials reserves will have political, economic, and security implications for Türkiye and its cooperation with western countries. In terms of politics, newly discovered reserves increase Türkiye's strategic importance and strengthen its position vis-à-vis the EU and the US. Secondly, cooperation with Türkiye can help EU countries diversify their imports and reduce their dependency on Russia and China. Finally, the collaboration between Türkiye and western countries can promote interdependence, minimize threat perception, and create more fruitful conditions for cooperation in the rare-earth industry.

Economic opportuinites

In addition to political opportunities, there are also economic opportunities for Türkiye and its cooperation with western countries. Firstly, developing the rare-earth industry can promote the economic diversification policy of Türkiye and lead to specialization in the extraction and procession of rare-earth materials. Secondly, improving the rare-earth sector can create a spillover effect that promotes attracting new investment and creating employment in the country.

Economic opportunities for EU countries may also promote cooperation with Türkiye. Ankara's rare earth reserves are close to the surface, which means that the cost extraction of materials will be easy and cheaper. By way of the new investment, EU countries can help Türkiye create technological capacity for extraction in the short term and improve processing technology in the medium term. As a result, they can reduce their economic vulnerability against China, enjoy geographical proximity to Türkiye, diversify their imports, and protect their technological and financial stability in the medium and long term.

Moreover, with the cooperation of the EU and the US, Türkiye can get technology to reduce the environmental damage of rare-earth extractions. This way, rare earth elements can be appropriately managed, recycled and introduced into new production cycles without requiring new soil extraction. Generally, cooperation between the EU and Türkiye on rare-earth materials can strengthen economic interdependence, create a mutually beneficial relationship and help to reduce the effects of any external economic and political economic shocks in the medium and long term.

Implications for defense sector

Finally, newly discovered rare-earth materials can play a vital role in the defense sector for both Türkiye and western countries because rare metals play a crucial role, from the production of drones to the production of the F-35s. Development of reserves helps Ankara decrease its dependency on other countries and can lead to self-sufficiency in the point of rare-earth materials. Furthermore, by cooperation with Türkiye, the EU and the US can secure the supply chain and guarantee relative stability in their defense sector.

In summary, newly discovered rare earth materials may play an important role for Türkiye and the West. In the short term, the extraction of resources will help Türkiye diversify its economy and create a chance for the EU and the US to diversify their imports and reduce their dependence on rival countries. In the medium and long term, Türkiye's specialization in the rare earth industry in terms of building technological capacity and especially in processing materials could strengthen Ankara's position in the global supply chain and create a chance for long-term sustainable cooperation with both the US and the EU.

*Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Anadolu Agency.