BAKU, Azerbaijan, November 2. Kazakhstan's
ability to strengthen its position in global supply chains will
depend not only on its mineral resources but also on its capacity
to process them domestically, according to a study by Boston
Consulting Group (BCG) titled "Why Critical Mineral Shortages Are a
CEO Issue".


"Amid the growing dependence of global industry on critical
minerals, Kazakhstan's role in global supply chains will be
determined not only by its resource base but also by the
development of its own processing capacity. Kazakhstan is already
taking steps to move from raw material exports towards deeper
processing and the development of higher value-added production.
Attracting international partners, investment, and advanced
technologies is becoming an important area of focus," said Mikhail
Volkov, Managing Director and Partner at BCG.


BCG also noted that even if a company purchases virtually no
critical minerals directly, it may still be heavily dependent on
their supply, as these minerals are used in electric motors,
magnets, power modules, lasers, and sensors. They are also used in
the equipment and manufacturing processes involved in producing
these components, ranging from crucibles, catalysts, and dies to
production machinery itself.







For example, turbine blades, engine blocks, and structural
components of aircraft are machined using tungsten carbide cutting
tools with cobalt binders. A manufacturer that has never purchased
these metals directly may nevertheless face production stoppages
due to a shortage of such tools. At the same time, this type of
dependence is not reflected in the material specifications of the
final product.


"Companies also tend to assess risks based on the geographical
distribution of critical mineral extraction. However, for some
minerals, the main bottleneck is not extraction but processing. At
the same time, the geographical locations of production assets and
their ownership structures may differ significantly. Therefore,
changing suppliers, which may appear to be diversification at first
glance, does not always reduce a company's actual dependence," the
BCG report says.