Казатомпром, ведущая урановая компания Казахстана, получила разрешение на проведение геологоразведочных работ на участке «Восточный», относящемся к месторождению Жалпак. Это разрешение позволит компании исследовать и уточнить запасы урана на данной территории. Ранее проведенные поисковые работы, финансируемые Казатомпромом, выявили наличие урановых залежей категорий Р1 и Р2. Оценочные запасы месторождения Жалпак составляют около 30 тысяч тонн урана. Новая геологоразведка направлена на переведение ресурсов в запасы категорий С2 и С1, а также на уточнение объема урановых запасов. Проект рассчитан на шесть лет, по завершении которых запасы будут поставлены на государственный баланс. В настоящее время Казатомпром ведет добычу урана на 26 месторождениях и обеспечивает около 20% мировой добычи урана в 2023 году.
Month: July 2024
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Kazatomprom Begins Geological Exploration at the Eastern Section of Zhalpak Deposit
Kazatomprom, the leading uranium company in Kazakhstan, has received permission to conduct geological exploration at the Eastern section of the Zhalpak deposit. This authorization will enable the company to investigate and refine the uranium reserves in this area. Previously, exploration funded by Kazatomprom discovered uranium deposits of categories P1 and P2. The potential reserves at the Zhalpak deposit are preliminarily estimated at 30 thousand tons of uranium. The new geological exploration aims to convert these resources into reserves of categories C2 and C1 and to determine more accurate uranium reserves. The exploration project is planned for six years, after which the calculated reserves will be recorded on the state balance sheet. Currently, Kazatomprom is extracting uranium from 26 deposits and accounted for about 20% of the world’s primary uranium production in 2023.
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U.S. Economic Security Hinges on Strategic Minerals from Central Asia and Beyond
The future of America’s economic and political security heavily depends on securing a stable supply of strategic minerals. These minerals are crucial for modern technologies, including smartphones, jet engines, and wind turbines. According to the World Economic Forum, strategic minerals are poised to become the “new oil” of the 21st century. The International Energy Agency predicts that demand for these minerals in the energy sector alone could triple by 2030.
Currently, the People’s Republic of China (PRC) dominates this critical sector, controlling 60% of global productionand 85% of processing capacity. This dominance poses a significant risk to future U.S. access to these essential resources. To mitigate this risk, the United States is exploring the potential of Central Asia, the Caucasus, and Ukraineas sources for strategic minerals. These regions are rich in largely unexploited natural resources that could be key to reducing reliance on China.
An aggressive pursuit of these resources could provide the United States with a secure supply of strategic minerals. Additionally, it would offer the broader Caspian region and Ukraine an opportunity for greater global market integration and economic sovereignty. By participating more meaningfully in the global strategic mineral supply chain, these regions could reduce their own dependence on Russia and China, thereby enhancing regional stability and economic growth.
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Kaz Critical Minerals Expands Exploration in East Kazakhstan with New Licenses and Partnerships
Kaz Critical Minerals LLP, a wholly-owned subsidiary of Kaz Resources LLC and a portfolio company of Cove Capital LLC, has achieved a major milestone in its exploration activities in East Kazakhstan. The company recently completed drilling the first 1,000 meters on its critical minerals licenses, uncovering several previously unreported positive anomalies. This discovery has prompted the company to extend its drilling program to better define these anomalies.
In addition to these findings, Kaz Critical Minerals has been granted two new exploration licenses, further expanding its operational footprint. This expansion will enhance the company’s ability to explore key areas with high potential for valuable mineral deposits, with an immediate focus on continued drilling operations.
Kaz Resources is also collaborating with Hatch, a globally recognized mining and engineering consulting firm. Hatch will provide professional services in key areas, leveraging its extensive experience in mining and infrastructure projects, including those in Kazakhstan. This partnership aims to enhance the efficiency and effectiveness of Kaz Critical Minerals’ exploration programs.
Pini Althaus, CEO of Kaz Resources, expressed enthusiasm about the progress, stating, “The encouraging drilling results, coupled with the new licenses and our partnership with Hatch, position us strategically to unlock Kazakhstan’s rich mineral resources. We are committed to driving progress and creating value for our stakeholders and Kazakhstan through meticulous exploration and innovative partnerships.”
Yuri Savguira, Senior Engagement Manager at Hatch, added, “We are excited to collaborate with Kaz Resources on this promising venture. Our combined expertise will support the development and execution of these projects, bringing our experience and excellence to the forefront.”
Kaz Resources remains focused on exploring and developing critical minerals essential for the energy transition, advanced technology, and defense applications. The company’s efforts align with Kazakhstan’s broader economic and sustainable resource management goals.
In 2023, Kaz Resources, through Kaz Critical Minerals LLP, became the first U.S. company to receive critical minerals and rare earths land concessions in Kazakhstan. These concessions include valuable minerals such as rare earth elements, lithium, tantalum, beryllium, niobium, cesium, and tin. A significant partnership with Kazakhstan’s national mining company, Tau-Ken Samruk, and Cove Capital was formed to explore and develop rare earth and critical metals, particularly at the Akbulak rare earth project in the Kostanay region.
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Kazakhstan’s Ambitious Industrial Expansion: 180 New Projects Set for 2024
Kazakhstan is set to launch 180 new projects by the end of 2024, with an estimated investment of 1.4 trillion tenge (US$2.9 billion), creating approximately 17,400 new jobs, according to the Prime Minister’s press service on July 24. These projects are expected to produce goods valued at nearly 1.8 trillion tenge (US$3.7 billion), including 400 billion tenge (US$843 million) for export and 1.4 trillion tenge (US$2.9 billion) for import substitution.
Key projects include the EkibastuzFerroAlloys plant in the Pavlodar Region, which will create 800 jobs with a 92.4 billion tenge (US$194 million) investment, producing 240,000 tons of ferrosilicon annually. In the Kostanay Region, a factory will produce cast iron components for trucks, providing 360 jobs with a 78.2 billion tenge (US$164 million)investment and an annual capacity of 45,000 tons.
The Zhetysu Wolfram company will develop the Boguty tungsten ore deposit in the Almaty Region, investing 135 billion tenge (US$284 million) to create 350 jobs and achieve an annual production of 3.3 million tons of ore and 10,000 tons of concentrate.
In the Almaty Region, a factory will produce thermal insulation materials, offering 220 jobs with a 43.9 billion tenge (US$92.6 million) investment, producing 1.4 million cubic meters of rock wool and 400,000 cubic meters of polymer insulation annually. Another facility will manufacture springs for rolling stock, creating 51 jobs with a 1.1 billion tenge (US$2.3 million) investment and an annual capacity of 298,500 springs.
Kazakhstan’s metallurgical production grew by 54.2% in the first five months of 2024, driven by increased output of ferroalloys, raw aluminum, raw lead, and refined copper. The country remains a major exporter of ferrous and non-ferrous metals, with exports rising by 8.3% to $4.7 billion in the first four months of 2024. The government has introduced new regulations for scrap metal collection and processing, including a ban on exporting ferrous scrap and non-ferrous metal waste.
The chemical industry saw investments reach 68.4 billion tenge (US$144 million) from January to May 2024, with new projects in technical silicon, hydrogen peroxide, and liquid nitrogen production. Nine new small enterprises opened, focusing on regions like Pavlodar and Zhambyl.
In the coal industry, a new government decree has granted exclusive licenses to coal mining and processing enterprises, aiming to meet domestic coal needs, particularly for the heating season.
Kazakhstan’s non-ferrous metallurgy sector has strengthened international cooperation, with agreements signed with China and South Korea. The machinery industry saw significant investment and modernization, with industrial production reaching 814.4 billion tenge (US$1.7 billion) in the first half of 2024.
The building materials and furniture industries also experienced growth, with regulations supporting local producers. The light industry saw a significant rise in production and exports, with investments in clothing and leather production increasing notably.
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“Samruk-Kazyna” Reports Record Revenue Amid Shifts in Investment Strategy
The National Welfare Fund “Samruk-Kazyna” achieved a record revenue of 15.4 trillion tenge in 2023, despite moving further from its ideal model as an investment holding. This shift is driven by the government’s efforts to maximize returns from the Fund as both a policy tool and a profitable asset. According to the latest audited financial report, Samruk-Kazyna continued to grow its assets, reaching 36.9 trillion tenge, a 10% increase year-on-year. This growth was fueled by significant investments in fixed assets, with a capital expenditure level of 17% of revenue, up from 9% the previous year. The Fund’s long-term assets expanded by 6% to 26.6 trillion tenge, while current assets increased by 18%, bolstered by a 17% rise in inventories and a 19% increase in receivables.
The asset structure saw a notable rebalancing of cash and deposits: cash holdings decreased by 7% to 2.7 trillion tenge, and bank deposits fell by 23%, with tenge deposits down by 27% and dollar deposits up by 18%. The overall asset growth of Samruk-Kazyna was driven by an increase in equity by 10%, a rise in retained earnings and non-controlling interests, and a 10% growth in liabilities. The liabilities included a reduction in fixed-rate loans by 9% and an increase in floating-rate loans by 19%, mainly short-term. The Fund’s short-term liabilities are now covered by cash at a rate of 61%, down from 71% the previous year. The currency composition of loans has remained consistent since 2022, with 58% in US dollars, 34% in tenge, and 4% each in Swiss francs and euros.
In 2023, the Fund’s revenue increased by 4%, driven by a modest rise in crude oil sales, which account for 30% of revenue, alongside declines in refined petroleum products and refined gold sales. These decreases were offset by significant growth in other sectors, including rail freight transport (up 30%), uranium sales (up 44%), and gas processing products (up 10%). The revenue growth was accompanied by a comparable increase in production costs, mainly due to a 23% rise in labor costs and a 15% increase in depreciation and amortization expenses. The Fund reported total write-downs of 262 billion tenge, five times higher than in 2022. Net profit decreased by 10% to 2.1 trillion tenge, largely due to a significant reduction in earnings from joint ventures and associates.
The relationship between Samruk-Kazyna and its sole shareholder, the government of Kazakhstan, remains complex. In 2023, total net cash distributions to the shareholder amounted to 1.3 trillion tenge, up from 306 billion in 2022. This included dividends of 1.27 trillion tenge, as well as other distributions for projects such as the construction of healthcare facilities and a sports complex. Meanwhile, the government recapitalized the Fund with 49 billion tenge, earmarked for infrastructure development in the National Industrial Petrochemical Park in Atyrau.
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Kazakhstan and Bulgaria Strengthen Educational Ties in Mining and Geology
Viktor Temirbayev, the Ambassador of Kazakhstan to Bulgaria, recently met with Ivaylo Koprev, the Rector of the University of Mining and Geology “St. Ivan Rilski,” to discuss expanding collaborations between higher education institutions in the two countries, particularly in the mining and geological fields. The discussions centered on the exchange of experience, best practices, and the implementation of joint projects in academic mobility.
Ambassador Temirbayev highlighted the Kazakh government’s efforts to develop the scientific system and incorporate advanced technologies in natural resource extraction, emphasizing the importance of geological science given Kazakhstan’s rich mineral resources. He also noted the celebration of the 125th anniversary of academician Kanysh Satpayev, a key figure in Kazakhstan’s industrial development.
Ivaylo Koprev shared the University of Mining and Geology’s best practices and teaching methods, expressing a desire to deepen cooperation with Kazakh universities to exchange advanced solutions and facilitate student exchanges under academic mobility programs. The University “St. Ivan Rilski” is recognized as Bulgaria’s sole state educational and scientific institution specializing in the mineral resources industry.
Both parties agreed to maintain ongoing communication to explore the potential collaboration areas discussed during the meeting. Notably, since the Cooperation Agreement between the Rudny Industrial Institute and the University of Mining and Geology in 2020, two academic mobility programs have been successfully implemented, with a third group of Kazakh students expected in September 2024.
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EU and Serbia Sign Agreement to Boost Lithium Supply Chain Development
The European Union has signed a pivotal agreement with Serbia to promote the development of lithium supply chains, marking a significant step in the EU’s strategy to build raw material partnerships and reduce reliance on fossil fuels. This agreement grants the EU access to raw materials mined in Serbia, aiming to enhance the production of sustainable raw materials, battery manufacturing, and electric mobility. A roadmap is set to be developed by the end of the year to foster research and training in lithium technology.
The deal has stirred controversy in Serbia, where debates over the rights to lithium mining and its environmental impact have been intense. In 2022, protests halted the mining activities of Rio Tinto, a company that had been developing what is now recognized as Europe’s largest lithium mine in the Jadar region. However, the ban was recently overturned as unconstitutional, allowing Rio Tinto to resume operations under a renewed commitment to meet strict environmental standards.
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Rio Tinto’s Serbian Lithium Project: A Major Boost for Economy and Jobs
Rio Tinto’s ambitious lithium project in Serbia is projected to attract 6 billion euro ($6.5 billion) in investments and create 20,000 jobs, according to Goran Vesic, Serbia’s infrastructure minister. Vesic revealed in an interview with local TV Happy that the country aims to become a key player in the battery and electric car manufacturing industry, with facilities set to utilize domestic lithium. Serbia secured a total of 4.5 billion euro in investments in 2023, showcasing its growing economic potential.
Addressing environmental concerns, Vesic emphasized that the Serbian government demands the highest ecological standards for the $2.55 billion Jadar project. Rio Tinto is required to submit an environmental impact assessment study for the mine. Vesic highlighted the significance of a recently signed memorandum of understanding between Serbia’s government and the European Union (EU), marking a pivotal moment in the country’s EU accession process. This agreement follows the reinstatement of permits for Rio Tinto’s lithium mine in the Jadar Valley, which had previously sparked protests over environmental issues.
Serbia’s president, Aleksandar Vucic, noted in a recent interview that the mine is expected to produce 58,000 tons of lithium per year, potentially supporting 17% of EV production in Europe, or about 1.1 million cars annually. The jadarite reserve, discovered by Rio in 2004, is set to become a cornerstone of Serbia’s industrial future, with plans for an underground mine to be completed by 2026.
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The Kazakhstan-American joint venture will engage in the exploration of rare and rare earth elements
Kazakhstan and the United States have formed a joint venture (JV) to explore rare earth metals at the Akbulak site in the Kostanay region. The agreement to establish a joint venture (JV) was signed today by the acting CEO of JSC ‘Kazgeology’ Dauren Abuov and the CEO of the American investment company Cove Kaz Capital Group LLC, Pini Althaus.
The JV, comprising KazGeology JSC with a 25% stake and Cove Kaz Capital Group with a 75% stake, will conduct geological exploration at the site, which historically contains reserves of rare earth elements.
The contract for conducting geological exploration at the ‘Akbulak’ site belongs to JSC Qazgeology (a wholly-owned subsidiary of JSC ‘Tau-Ken Samruk’ National Mining Company and parent company, SAMRUK-KAZYNA). Until the reserves are accounted for, the project will be financed by the American side, after which financing will be distributed proportionally to the shares in the JV. As previously reported, JSC ‘Kazgeology’ will hold a 25% stake in the JV, and Cove Kaz Capital Group will hold 75%.
Cove Kaz Capital Group will finance the project until reserves are listed on the balance sheet, after which financing will be distributed proportionally to the shares in the JV.
Cove Kaz Capital Group LLC is part of the international investment group Cove Capital LLC, which has been investing in mining projects from the exploration stage to construction since 2015. Cove Capital offices are located in the USA and Australia. In Kazakhstan, the group also owns ‘KAZ Critical Minerals’ LLP (through KAZ Resources LLC (USA)).
The portfolio of JSC ‘Kazgeology’ includes more than 30 investment projects for the exploration of copper, gold, polymetals, iron, and chromium with foreign and Kazakhstani partners such as Rio Tinto, Yildirim Holding A.S., Solidcore Resources plc, ‘KazZinc’ LLP, and ‘Kazakhmys’ LLP. The company is also implementing a joint project with ALS Limited – a geochemical laboratory for core analysis – ‘ALS Kazgeochemistry’ LLP.
In 2023, 100% of the voting shares of JSC ‘Kazgeology’ were transferred to the National Mining Company JSC ‘Tau-Ken Samruk’ National Mining Company.