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UK Supports €12.6M Deal to Boost Exports to Uzbekistan’s Copper Producer

UK Export Finance (UKEF) has guaranteed a €12.6 million ($13.25 million) loan to the Almalyk Mining and Metallurgical Complex (AMMC) in Uzbekistan. The loan will refinance the purchase of fully automated vehicles from the Scottish multinational company Weir and marks UKEF’s first agreement in Uzbekistan. The loan, provided by the International Bank, aims to support Weir’s exports to AMMC, one of Central Asia’s largest copper production facilities. “UK businesses are increasingly keen to bring their goods and services to this dynamic market - and UKEF is here to help buyers in Uzbekistan seize this opportunity,” said Tim Reid, CEO of UKEF. Strategic Importance of Copper The UK Department of Business and Trade reports that nearly 90% of UK imports from Uzbekistan consist of non-ferrous metals, metal ores, and slag. Copper, a vital material for construction and green technologies such as solar panels and electric vehicles, is in increasing demand. Global copper requirements are projected to grow by an additional one million tons annually until 2035. The UKEF-backed deal reflects the UK’s commitment to enhancing machinery exports and supporting the global supply chain. In 2023, total trade between the UK and Uzbekistan reached £381 million, with specialized machinery ranking as the fourth most-traded category. Sustaining Production at Almalyk UKEF’s financial backing is crucial for sustaining production at AMMC by ensuring access to capital from a trusted supplier. The partnership highlights UKEF’s broader role in facilitating growth opportunities for UK businesses in Central Asia’s dynamic market.

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Kazakhstan Building Five Cross-Border Trade Hubs

Kazakhstan is advancing plans to establish five cross-border trade and economic hubs, aiming to position the country as a key global transport and logistics center. The initiative was reviewed at a government meeting on December 10. Strategic Hub Development Minister of Trade and Integration Arman Shakkaliyev reported that significant progress has been made on the hubs, with rail and road links already in place. The planned hubs are: The Khorgos Hub: Located on the border with China. The Caspian Hub: Situated along the Trans-Caspian International Transport Route (TITR). The Eurasia Center for Cross-Border Trade: Positioned at the border with Russia. The “Central Asia” International Center for Industrial Cooperation: At the border with Uzbekistan. The Industrial Trade and Logistics Complex: At the border with Kyrgyzstan. Additionally, container hubs are planned for the ports of Aktau and Kuryk in the Mangistau region. Multimodal air hubs are also under development at airports in the cities of Astana, Almaty, Shymkent, and Aktobe. Broader Economic Goals Prime Minister Olzhas Bektenov underscored the strategic importance of these projects, emphasizing their potential to reduce transit times, boost industrial production, increase tax revenues, and create new jobs. Bektenov highlighted that the network of hubs will form a unified trade and transport space with Kazakhstan’s key trading partners. “This will significantly increase trade turnover between the countries and strengthen strategic relations with neighboring states,” he said. The prime minister also stressed the importance of leveraging major transport corridors such as the East-West, North-South, and Trans-Caspian International Transport Route corridors to enhance access to the markets of China, the Persian Gulf, the Caucasus, and Europe.

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Kazakhstan, Xinjiang, and Hong Kong Forge Trilateral Partnership to Boost Trade, Investment, and Connectivity

Kazakhstan, China’s Xinjiang Uyghur Autonomous Region (XUAR), and the Hong Kong Special Administrative Region have agreed to establish a joint mechanism for trilateral cooperation. The agreement was reached on December 5 during a meeting in Urumqi, Xinjiang, attended by Kazakhstan's Vice Prime Minister Serik Jumangarin, XUAR Party Committee Secretary Ma Xingrui, and Hong Kong’s Secretary for Commerce and Economic Development Algernon Yau. At the meeting, Ma Xingrui underscored Xinjiang’s strategic role as a bridge connecting Kazakhstan with Hong Kong and the broader Belt and Road Initiative. Highlighting Kazakhstan as a critical transport hub linking Europe and Asia, and Hong Kong as a global trade and logistics center, Ma proposed developing a framework for collaboration. The suggested mechanism would focus on boosting investment and strengthening cooperation in key sectors, including finance, energy, agriculture, logistics, and cultural exchanges such as education, healthcare, tourism, and scientific research. Vice Prime Minister Jumangarin proposed establishing a Kazakhstan-Xinjiang-Hong Kong Cooperation Council to create actionable strategies for enhancing investment, trade, and economic ties. He suggested hosting the council’s inaugural meeting in Kazakhstan next year. Jumangarin also highlighted China’s significant investment in Kazakhstan, noting 145 joint projects worth $38 billion and 5,000 joint ventures currently operating in the country. He invited businesses from Hong Kong and Xinjiang to collaborate on establishing production facilities in Kazakhstan, particularly for the deep processing of agricultural raw materials. “Kazakhstan is a major exporter of grain and oilseed products, with growing livestock exports,” Jumangarin said. “We encourage businesses from Hong Kong and Xinjiang to partner with us in producing value-added food products.” Hong Kong’s Secretary for Commerce, Algernon Yau, emphasized the city’s status as the world’s third-largest financial center and a global aviation hub connecting over 200 destinations. He welcomed Kazakh enterprises to register in Hong Kong, highlighting the city’s strong ties with ASEAN countries, which could provide Kazakh companies with expanded access to those markets. In a separate meeting, Jumangarin and Ma Xingrui discussed plans to double trade turnover between Kazakhstan and Xinjiang. XUAR is Kazakhstan’s largest trading partner among Chinese regions, accounting for nearly half of the bilateral trade volume. In 2023, trade between Kazakhstan and XUAR grew by 62%, reaching $20.3 billion. During the first nine months of 2024, trade increased by another 22.46%, reaching $17.67 billion. Both sides are working toward the goal set by the presidents of Kazakhstan and China to raise overall trade turnover to $100 billion. Another key topic was the development of river transportation as an alternative to road and rail routes. Kazakhstan proposed creating a multimodal transit corridor through Russia, Kazakhstan, and China using the transboundary Irtysh River, with initial freight traffic volumes projected at 2–2.5 million tons. Additionally, a potential route along the transboundary Ili River was discussed, linking the Kazakh city of Konayev with the Chinese city of Yining. The agreements reached at the trilateral meeting represent a significant step toward closer collaboration between Kazakhstan, Xinjiang, and Hong Kong. With plans to enhance trade, investment, and infrastructure development, the partnership holds great...

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Kazakhstan and China Digitalize Customs Procedures on Middle Corridor

Kazakhstan Temir Zholy (KTZ), Kazakhstan's national railway company, has announced the digitalization of customs declaration procedures for transit cargo along the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, at the border between Kazakhstan and China. In collaboration with Global DTC, KTZ Express - a subsidiary of KTZ - has launched the Tez Customs digital platform. This system transitions customs operations to a paperless format, reducing processing time to just 30 minutes after a train's arrival at the border station. The platform enables preliminary preparation of documents, automatic registration, and issuance of transit declarations. These capabilities optimize logistics processes, enhance transparency at all stages of customs clearance, and significantly reduce the time required for customs operations. Since May 2024, Tez Customs has fully automated customs clearance processes for transit cargo along the China–Central Asia route via Kazakhstan, specifically along the Altynkol-Saryagash section. In October 2024, its scope was expanded to include cargo transported along the Middle Corridor. To date, Tez Customs has processed over 54,000 transit declarations on the China to Central Asia route and more than 5,000 declarations on the TITR. The Trans-Caspian International Transport Route serves as a critical link between China and Europe, passing through Kazakhstan and the Caucasus. More than 80% of all land cargo transported from China to Europe travels through Kazakhstan, according to Kazakh statistics. During the first nine months of 2024, the volume of cargo transported along the Middle Corridor increased by 23% compared to the entirety of the previous year, reaching 3.4 million tons. Projections suggest that by 2030, this figure will rise to 10 million tons annually. The digitalization of customs procedures via Tez Customs represents a significant advancement in the efficiency and transparency of transit operations on the TITR. This innovation reinforces Kazakhstan’s position as a vital transit hub for trade between China, Central Asia, and Europe, while also supporting the continued growth of cargo volumes along the Middle Corridor.

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Central Asia Prioritizes Food Security Amid Shared Challenges

Food security remains a top priority for Central Asian nations, yet they face shared challenges that threaten regional stability. Deteriorating water resources, climate change, reliance on external food markets, and geopolitical pressures have intensified the need for regional cooperation in addressing these issues. Bilateral and Regional Efforts Talks between the presidents of Uzbekistan and Kazakhstan, Shavkat Mirziyoyev and Kassym-Jomart Tokayev, on August 8 underscored the importance of collaboration. The two leaders witnessed the signing of an agricultural cooperation agreement between their respective ministries. This followed Tokayev’s November 2022 visit to Tashkent, which was particularly productive in advancing food security. Agreements included joint production of mineral fertilizers and a bilateral cooperation program worth $1.3 billion aimed at boosting mutual trade and developing agricultural projects. Trade within Central Asia has grown significantly, with Uzbekistan’s trade volume with its neighbors nearly doubling between 2017 and 2019. Kazakhstan, the region’s leading grain supplier, plays a central role: • Uzbekistan accounts for 60% of Kazakhstan’s grain exports. • Tajikistan consumes 18%. • Kyrgyzstan takes 14%. • Turkmenistan absorbs 6%. Despite this growth, experts highlight the untapped potential for expanding trade and cooperation in agriculture. Common Challenges Food security challenges are compounded by shared threats, including demographic growth and dwindling water resources. The region’s population has reached 75.5 million, while irrigated land per capita has decreased by more than 25% over the past 15 years. Water availability in the Syr Darya and Amu Darya river basins—crucial for irrigating 10 million hectares - faces a projected 15% decline. This is exacerbated by the alarming retreat of glaciers that feed these rivers, jeopardizing long-term agricultural sustainability. The Need for Regional Solutions While each Central Asian country primarily relies on its resources to address food security, the interconnected nature of these challenges calls for a collective approach. Enhanced regional cooperation is essential to develop resilient agricultural systems, manage water resources effectively, and ensure sustainable growth in food production.

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Harnessing Diplomacy: Qosh Tepa Canal as a Bridge to U.S. Influence in Central Asia

The Center for the National Interest, a Washington, D.C.-based think tank, has released a report titled Afghanistan’s Qosh Tepa Canal and Water Security in Central Asia. The report outlines how U.S. support for the Qosh Tepa Canal project could provide an opportunity for the incoming Trump administration to strengthen its influence in the region. Project Overview Currently under construction in northern Afghanistan, the Qosh Tepa Canal aims to divert water from the Amu Darya River to support agriculture and economic growth. The canal will stretch 287 kilometers, with a depth of 8.5 meters and an average width of 100 meters. Once completed, it will irrigate more than 1.2 million acres of farmland and generate approximately 200,000 jobs in northern Afghanistan. While the Taliban has championed the project as a cornerstone of Afghanistan’s development, the canal poses significant challenges for downstream countries reliant on the Amu Darya, particularly Uzbekistan and Turkmenistan. Concerns include potential water scarcity, environmental degradation, and heightened regional tensions. Implications for Central Asia The report highlights that the canal could exacerbate existing disputes over water allocation in a region already plagued by scarcity. Unlike its Central Asian neighbors, Afghanistan is excluded from water-sharing agreements rooted in the Soviet era. The poorly designed Soviet canals along the Amu Darya continue to undermine water security in the region decades after their construction, a fate experts hope to avoid with Qosh Tepa. Recommendations for U.S. Engagement The report urges the United States to seize this opportunity to engage Afghanistan and the broader region diplomatically and technically: 1. Support for a Well-Engineered Canal The United States should advocate for a well designed canal that prioritizes water-use efficiency. By offering technical assistance and backing the project in principle, the U.S. could pave the way for multilateral development banks, such as the World Bank, the European Bank for Reconstruction and Development, and the Asian Development Bank, to provide financial and technical support. 2. Promote Regional Water Diplomacy Washington should encourage negotiations for a regional water-sharing agreement among Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. 3. Assist Downstream States Additional investments in modernizing irrigation systems in Uzbekistan and Turkmenistan could mitigate the canal's impact on downstream water availability. Strategic Context The report underscores the geostrategic importance of Afghanistan and Central Asia, which border three of Washington’s primary global competitors: China, Russia, and Iran. By supporting the Qosh Tepa Canal project and fostering regional water-sharing cooperation, the U.S. could counterbalance the growing influence of Beijing, Moscow, and Tehran in the region. A Watershed Moment As construction progresses into its second phase, involving thousands of workers and heavy machinery, the Qosh Tepa Canal stands at the nexus of development and diplomacy. The report concludes that U.S. involvement in this critical project could serve not only to address Central Asia’s pressing water security challenges but also to reinforce Washington’s strategic position in one of the world’s most complex geopolitical arenas.