Astana, Kazakhstan – The 14th Mountain Geological Forum, MINEX Kazakhstan, commenced its proceedings, focusing on the theme of “Sustainable Development of the Mining Industry for the Benefit of Society and the Environment.” Over 450 specialists from 235 companies and organizations spanning Kazakhstan and 32 countries across Europe, Central Asia, North and Latin America, Africa, Southeast Asia, the Middle East, and Australia are participating in the event.
More than 50 Kazakhstani and international companies are showcasing cutting-edge technologies for prospecting, extraction, and processing of mineral resources at the forum’s exhibition. Attendance by approximately 1000 specialists from Kazakhstan and abroad is anticipated.
Of notable significance this year is the record participation of foreign investors at the forum, demonstrating keen interest in exploring and developing deposits of precious metals, copper, coal, lithium, uranium, as well as rare and rare-earth metals.
During the plenary session, the Executive Director of AGMP, Nikolai Radostovets, addressed the key directions for the development of the mining and metallurgical industry in Kazakhstan. He emphasized crucial tasks such as replenishing the mineral resource base, enhancing domestic value, and raw material processing.
With the depletion of the mineral resource base and the decline in the content of useful components in ore, there is a pressing need to increase geological exploration activities and provide incentives for investments in geological exploration. In this regard, the association’s leader proposed revising the algorithm for accounting and taxing expenditures on geological exploration. Specifically, he suggested refining the Tax Code to allow deductions for all expenses on geological exploration regardless of the allocation of individual sites into new contracts, as well as establishing deductions for corporate income tax on expenditures for geological exploration of solid minerals through existing extraction contracts.
To incentivize involvement in raw material processing, he proposed enshrining several provisions in legislation. These include exempting subsoil users’ non-extractive mineral resources from the mineral extraction tax (MET) and not levying fees for their re-placement after processing. Regarding non-state-owned mineral resources, extraction should proceed as per current regulations, with a reduced MET rate applied to stimulate their processing.
Addressing tasks related to enhancing domestic value, Radostovets highlighted AGMP’s comprehensive approach aimed at satisfying the needs of domestic manufacturers and mitigating risks for subsoil users in procurement.
“We plan to convene with domestic manufacturers at the NPP platform shortly and propose that for the products that Kazakhstani enterprises can produce, we will enter into off-take contracts,” he specified. “We are prepared to compile and approve a list containing the range of goods manufactured in Kazakhstan or those that can be produced in the medium term. For other types of products, we should have open procurement under standard conditions, possibly from a single source, as these are goods not produced in Kazakhstan.”
The Executive Director of AGMP also underscored the development of raw material processing in Kazakhstan, recalling legislative amendments enacted for licensing metal exports. These amendments, effective from October of the current year, will only grant export licenses if metallurgical enterprises fulfill certain obligations and meet domestic market demands. He noted the association’s preference for stimulating enterprises to process natural resources within the country to foster the development of metal processing and the establishment of metallurgical clusters.
“Investment agreements, processing agreements have not yet kicked off,” expressed R. Baimishev. “There hasn’t been a single agreement with an investment volume of $50 million. Yet, there are proposals to increase them by 10 times – up to $500 million. We believe these are premature steps. Furthermore, we believe it is necessary to stimulate the development of deeper horizons. Mine construction requires substantial investments and government support,” he observed.
In turn, the Chairman of the Board of AO “National Mining Company “Tau-Ken Samruk” Bakyt Chirchikbayev provided an update on the completion of the transfer process of 100% of the shares of AO “NGC “Kazgeology” to “Tau-Ken Samruk” in September of the previous year. He outlined steps taken to optimize management processes, reduce costs, and eliminate duplicate functions, such as merging functions related to geological exploration and joint project implementation with foreign partners. Following the consolidation of these functions, their asset portfolio comprises 53 geological exploration projects, with collaboration involving more than 15 participants.
“It can be noted that we have become a sort of unified window for investors in the geological exploration sector for developing joint projects, and we see ourselves as minority participants in the development of these projects to avoid burdening quasi-state companies with such requirements and to manage companies more flexibly,” he remarked.
Chirchikbayev emphasized that the company’s geologists are currently exploring promising directions and have already identified several prospective sites. “Tau-Ken Samruk” is open to partners, including junior companies, for the development of these projects.
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