MINEX Forum

Region: Kazakhstan

  • Central Asia Metals Reaffirms Strong Production, Seeks Growth Opportunitie

    Central Asia Metals Reaffirms Strong Production, Seeks Growth Opportunitie

    Nigel Robinson discusses the positive production results for 2023, with copper, zinc, and lead all meeting or exceeding guidance. He emphasizes the company’s focus on business development and growth opportunities. Kazakhstan is highlighted as a potential area for future projects, with the company teaming up with experienced geologists to explore for new opportunities. R

    Central Asia Metals (CAML), a diversified base metals producer, has demonstrated resilience and strategic growth amidst challenging economic conditions in the first half of 2024. Despite facing a 17% decline in metal prices, cost inflation of 10-15%, and tax increases in Kazakhstan for the first time in a decade, CAML has maintained a strong performance. The company reported the production of 6,700 tons of copper, 9,700 tons of zinc, and 13,700 tons of lead in the first six months, aligning with its annual production guidance. This achievement was underscored by a commendable safety record, with a Lost Time Injury Frequency Rate (LTIFR) of 0.8, surpassing the target of 1.3.

    Financially, CAML showcased robust results with revenue just under $100 million and an EBITDA of approximately $49 million, translating to a 49% EBITDA margin. The company also generated $24.1 million in free cash flow, enabling a dividend payout of nine pence per share. This financial health is further bolstered by a debt-free balance sheet and cash reserves of $50.6 million.

    Strategic projects such as the Sasa transition to paste fill mining and the construction of a solar farm are on track, promising operational and environmental benefits. The transition to paste fill mining at the Sasa mine is expected to enhance metal recovery, reduce dilution, and enable access to complex ore bodies, while also addressing waste management challenges.

    On the business development front, CAML has been active, evaluating 22 opportunities, signing five NDAs, and conducting three site visits. Although two focused opportunities did not materialize, the company remains committed to growth, leveraging its strong balance sheet to explore early-stage opportunities and transformative transactions.

    CAML’s partnership with Terra Exploration in Kazakhstan exemplifies its strategy to identify and develop early-stage mining opportunities. This collaboration aims to leverage Terra Exploration’s expertise and CAML’s resources to secure new licenses and potentially discover viable mining projects.

    The company’s commitment to Environmental, Social, and Governance (ESG) principles is evident in its reporting and operational practices. CAML has published its fourth sustainability report, supports the Task Force on Climate-related Financial Disclosures (TCFD), and plans to report its Scope 3 emissions. Internally, CAML has set ambitious targets across key sustainability pillars, including a 50% reduction in greenhouse gas emissions by 2030 and increased local community investment.

  • The Ministry of Industry and Construction sends out “letters of happiness” to subsoil users

    The Ministry of Industry and Construction sends out “letters of happiness” to subsoil users

    The Ministry of Industry and Construction notified the company of incomplete fulfillment of its contractual obligations regarding investments in exploration and drilling work under the exploration contract in 2021, the inbusiness.kz correspondent reports.

    In early December, the Ministry of Industry and Construction (MIC) notified the gold mining AltynEx Company, which is developing the Yubileinoye gold deposit in the Aktobe region, of violations under contract 2560 dated January 28, 2008 for the exploration of gold and base metals. This information follows from a letter posted on the website of the industry department.

    “For 2021: execution of investments is 82.69%, or 218,041.53 thousand tenge, with a planned indicator of 263,700.625 thousand tenge; execution of exploration costs is 75.53%, or 181,438.06 thousand tenge, with a planned indicator of 240,219.66 thousand tenge; execution of drilling work is 26.32%, or 5 wells, with a planned indicator of 19 wells; execution of drilling work is 0%, or 0 linear meters, with a planned indicator of 5582.5 linear meters In this regard, within one month from the date of receipt of this notice, you need to: eliminate violations of contract obligations, as well as submit all the necessary documents confirming their elimination (copies of payment orders, contracts, certificates of completion of work),” says the correspondence of the relevant ministry .

    In case of failure to comply with the notification requirements within the prescribed period, the competent authority has the right to take measures in accordance with the terms of the contract and current legislation, including terminating the contract unilaterally in accordance with the Subsoil Code, the Ministry of Industry warns.

    Let us recall that in October inbusiness.kz wrote that Altynex did not fulfill its contractual obligation to build a gold recovery plant at the Yubileinom deposit. According to the website of the Kazakhstan Stock Exchange, A. R. Sarsenov is a 100% shareholder of AltynEx Company.

  • December auctions for exploration of solid minerals in Kazakhstan: newcomers crowd out sharks

    December auctions for exploration of solid minerals in Kazakhstan: newcomers crowd out sharks

    The Ministry of Industry and Construction (MIC) published on its website detailed results of the December auction for exploration blocks within the framework of licenses issued by the department for the exploration of solid minerals. An inbusiness.kz correspondent studied the results of most trades.

    Judging by the data presented, the greatest interest in terms of the size of the final subscription bonus was generated by the lot for two blocks, where Novus Trade won the auction. She offered a rather large sum of 619 million tenge for it, which was much more than the auction bid of the KazGeoExploration company of 562.8 million tenge.

    By the way, in addition, Novus Trade won an exploration license for one block for 67 million tenge and two more blocks for almost 9 million tenge. Moreover, it became the winner in a competitive tender with the participation of four companies for 1 block, setting the final price at 11.2 million tenge. In these auctions, Novus Trade managed to beat Kazakhmys, Phoenix Mining and AvantEx, which offered lower auction steps of almost 9 million tenge, 4.6 million tenge and a starting price of 966,000 tenge, respectively. That is, in fact, Novus Trade spent more than 700 million tenge on all blocks received during the auction.

    The second largest signing bonus for an exploration license for another lot was given by the company ES Mining Group – its quotation at the auction was stated in the amount of 422.8 million tenge, also for two blocks, which became the final size of the signature bonus.

    The third most prized lot is the bid of Rio Tinto Exploration Kazakhstan for 173.7 million tenge for 130 blocks. Apparently, they are determined to continue geological exploration in Kazakhstan, despite many years of presence in the country without any high-profile discoveries. Therefore, the Kazakh subsidiary of one of the largest mining and metallurgical corporations in the world bought another 68 blocks at an auction organized by the Ministry of Industry for almost 22 million tenge in a fight with Kratos Resources, which offered 17.6 million tenge for these subsoil use rights.

    In addition to Rio Tinto, the Australian company Fortesque, which previously returned licenses to the Ministry of Industry, continues to remain active in geological exploration in Kazakhstan. Its Kazakh subsidiary, Kazakhstan Fortescue, won two lots during the auction: one for 17 blocks for 100.5 million tenge, and the other for 28 blocks for a starting subscription bonus of 966 thousand tenge.

    Based on the results of the auction, one can also note the activity of Kazakhmys, which won 11 of the more than 40 lots on offer for a total amount of more than 55 million tenge for 37 exploration blocks, which probably indicates a high readiness for big discoveries on the part of the team’s geologists Kazakhmys Barlau, which was created in 2018.

    Also on the list of winners of the subsoil use rights tender are companies with little-known names that received licenses for a lot of money. So, for example, Golden Mouse Mining acquired the rights to 5 exploration blocks at an auction for 173.7 million tenge. Another subsoil user called Lakeside Minerals Limited paid 100.5 million tenge for 13 blocks – judging by the contact information, it is associated with the Aurora Minerals company, and the widely unknown Ali-Nur Zhane Company supplied 144.8 million tenge for 2 blocks. I am glad that investors value Kazakhstan’s mineral resources, which belong to the people, and give a good price to the treasury for them.

    Let us recall that at the end of last year the Ministry of Industry reported that on December 20 an electronic auction was held for the right to explore solid minerals in 45 subsoil areas. As a result of the auction, signature bonuses amounting to 2.5 billion tenge were collected. Among the auction participants were such large companies as Rio Tinto, Fortescue, Kratos Resources, Cove Capital, Eczacibasi Holding, Kazakhmys, ERG Exploration and Kazgeology, the industry department specified.

  • Kazzinc began to produce more gold

    Kazzinc began to produce more gold

    The Kazzinc company is actively increasing its gold mining and production. At the end of 2023, the Kazakh enterprise produced about 35 tons (1.124 million ounces) of the precious metal. This information is reported by i nbusiness.kz , citing data from the company’s key shareholder, trader Glencore.

    In 2023, Kazzinc produced 18.6 tons (598 thousand ounces) of gold from raw materials mined at its deposits, which is 1.6 tons (52 thousand ounces) more than in 2022. This is due to the fact that the year before last, to fulfill the plan, they purchased raw materials from other companies, and processed a significant part of their volumes already in 2023. If we take into account foreign raw materials, production growth was 23% – almost 35 tons of precious metal versus 28.4 tons in 2022. 

    This rapid pace of work is partly due to the depletion of what was once the country’s largest deposit. Let us remind you : the main reserves of Vasilkovsky have already been used up, so by 2026 production will be curtailed. Until then, ore will be mined primarily in open-pit mines. Following the closure of the mine, Kazzinc is likely to significantly reduce gold production. 

  • By 2029, Kazakhstan plans to increase mineral resources production by 40%

    By 2029, Kazakhstan plans to increase mineral resources production by 40%

    The metals and other minerals mining industry has been tasked with achieving 40% growth by the end of the decade. The National Development Plan of Kazakhstan, scheduled until 2029, was published on the portal “Open Regulatory Legal Acts” .

    Among the problems that hinder the development of the mining industry, the document notes such as the depletion of the mineral resource base, the high energy intensity of the industry with a probable energy shortage (leading to a decrease in the competitiveness of products), rising labor costs, etc.

    Despite significant mineral deposits, there are few deposits in the republic that are ready for development. The authorities fear that in the next 10–20 years the production of the main export metals: copper, chromium and iron will decrease significantly. In addition, the plan notes that the Republic of Kazakhstan is not realizing its potential for the production of nickel, cobalt, lithium, as well as other rare and rare earth metals.

    First of all, Kazakhstan wants to solve the problem of low geological exploration activity. By 2029, the geological and geophysical exploration of the territory is expected to increase from 1.9 to 2.3 million, and the reserve replenishment rate for critical metals is expected to increase to 20–50%.

    It is proposed to stimulate companies through co-financing, exemption from VAT, depreciation of 25% of expenses for geological exploration work for solid mineral deposits (the practice is valid for hydrocarbon exploration) and other financial support instruments.

    In addition, the country wants to create an infrastructure for storing and processing geomaterials, in particular, to build a storage facility and core storage facilities on the basis of a geological cluster in the capital and other regions of the country.

    The National Development Plan also takes special control over the development of technogenic mineral formations . In order to increase the extraction of useful components from industrial waste, the tax rate for investors may be revised.

  • In 2025, two coal faces will be launched at the Abayskaya mine

    In 2025, two coal faces will be launched at the Abayskaya mine

    The Qarmet company plans to open two longwalls at the Abayskaya mine. This is how the enterprise wants to partially satisfy its needs for coal, reports the press service of the akimat of the Karaganda region. The total reserves of raw materials at these facilities amount to 1.25 million tons.

    At the moment, miners are extracting coking coal. Drilling was also resumed, says Abayskaya director Andrey Sosunov. Longwall 321k12 is planned to open in early 2025, and the launch of the second one, with smaller reserves, is scheduled for the end of next year. The volumes of raw materials in the mine workings are 650 thousand and 600 thousand tons, respectively.

    Resuming coal mining is one of Qarmet’s priorities. According to the general director of the company, Vadim Basin, maintaining idle facilities is unprofitable for the enterprise. When there is not enough coal, you have to buy it from other enterprises. This is also unprofitable for miners: they cannot receive bonuses for production, since the intensity of work leaves much to be desired. It is important to take into account that the enterprise is large and there are more than 750 people in the miners’ team.

    President of the Republic of Kazakhstan Kassym-Jomart Tokayev gave the management of Qarmet five years to completely restore the plant. According to the president, this time is enough to return him to the status of one of the leaders in metallurgy in Central Asia.

  • Black snow in Satpaev is associated with gases from the Kazakhmys Distribution boiler house

    Black snow in Satpaev is associated with gases from the Kazakhmys Distribution boiler house

    Black snow in Satpayev is associated with gases from the boiler house of Kazakhmys Distribution, the agency’s correspondent reports.

    “On January 31, 2024, in the afternoon, almost all residents of the city of Satpayev witnessed the fall of “black snow.” It has been established that the fall of “black snow” is due to air pollution from the exhaust gases of the boiler house of Kazakhmys Distribution LLP,” the KazTAG editors answered in the Department of Ecology for the Ulytau region on Saturday.

    In fact, as they say in the department, unburnt coal dust fell on Satpayev.

    Experts said the direction of the wind contributed to the “black” precipitation. Environmentalists say that all boiler equipment of Kazakhmys Distribution is obsolete and incorrect operation of treatment facilities has been observed; a number of violations have been identified regarding the depressurization of equipment. In addition, “the boiler house is designed to consume high-ash coal and replacement with low-ash coal is technically impossible.”

    The company has already been repeatedly subject to administrative penalties and issued orders.

    “According to Kazakhmys Distribution LLP, the program for switching to gas turned out to be unfeasible due to the shortage of gas in the republic in a number of regions. Accordingly, the department has set a task to review it within a 10-day working period and replace it with measures to reduce emissions through the introduction of additional treatment systems or the adoption of technical solutions to actually reduce emissions of both gases and solids,” the department concluded .

    Experts promise to inspect the boiler room in February.

  • The Republic of Kazakhstan will continue to support projects for the implementation of IT solutions in production

    The Republic of Kazakhstan will continue to support projects for the implementation of IT solutions in production

    Kazakhstan has developed various support measures for industrial enterprises that intend to master and implement digital technologies. The Ministry of Industry and Construction (MCC) of the Republic of Kazakhstan is ready to provide companies with various assistance, including financial assistance, the department’s press center reports.  

    According to the Bureau of National Statistics, the number of medium and large manufacturing enterprises that have successfully mastered IT has been growing by an average of 3.5% in recent years. Now the share of such enterprises is 12.9%.

    At the Digital Almaty-2024 exhibition, the Ministry of Railways said that assistance can be of a different nature – from consultations on the implementation of IT products to partial reimbursement of costs. As for industrial enterprises, the Ministry of Industry conducts a technology audit upon request and reimburses up to 50% of the costs of organizing the digital environment. 

    In order to accelerate the digitalization of industry, a special training platform digital.qazindustry.gov.kz was created for Kazakh entrepreneurs. Thanks to this, industrial enterprises gained access to tools for introducing digital technology. Among them are 549 articles, cases from countries with a high rate of digitalization and almost 1.5 thousand IT profiles of companies in 15 categories.

    Representatives of the national company Kazatomprom who participated in the conference reported that new technologies allowed the company to strengthen control in hazardous areas. Employees also said they were pleased with the implementation of a corporate application that helps track routine work processes such as daily briefings or pre-shift inspections. It is expected that more than 20 thousand Kazatomprom employees will use the application.

  • The Mazhilis of the Republic of Kazakhstan is concerned about the rise in price of coal on the domestic market

    The Mazhilis of the Republic of Kazakhstan is concerned about the rise in price of coal on the domestic market

    Fuel prices on the domestic market of Kazakhstan are constantly rising during the heating seasons, including due to intermediary companies. A parliamentary request related to the rise in coal prices was voiced by deputy Sergei Ponomarev during a plenary meeting of the Majilis. The portal Informburo.kz writes about this .

    According to Mr. Ponomarev, intermediaries significantly increase the final cost of fuel. As an example, he cited coal prices in the Shet region – 25 thousand tenge per 1 ton, while directly at the exit from the Shubarkol deposit, raw materials cost almost three times less – 8.5 thousand tenge per 1 ton.

    Majilismen want the Agency of the Republic of Kazakhstan for the Protection of Consumer Rights to get involved in solving the problem. The department needs to identify unscrupulous intermediary companies and achieve a reduction in prices for coal, which residents of the republic buy at retail.

    In addition, in their request, the deputies noted another controversial point in the development of the industry. As Mr. Ponomarev emphasized, some companies mining coal “give nothing to the state in return,” which is prohibited by the republican subsoil code.

    For example, the Majilisman is dissatisfied with the activities of the Aktas Komir enterprise, which has not yet built a special coke production facility in the Karaganda region, although it is increasing its coal production every year.

    The deputies also propose that the Supreme Audit Chamber of Kazakhstan conduct an assessment of the effectiveness of the industrial and innovative development program and identify which industry companies use public funds irrationally.

  • The president of Kazakhstan met Meirzhan Yusupov the Chairman of the Board of NAC Kazatomprom

    The president of Kazakhstan met Meirzhan Yusupov the Chairman of the Board of NAC Kazatomprom

    Kassym-Jomart Tokayev heard a report on the results of Kazatomprom’s activities for 2023, as well as on the company’s goals and plans in the short and medium term.

    The President was informed that at the end of last year, the production and sales of uranium products amounted to more than 21 and 18 thousand tons, respectively. As Meirzhan Yusupov reported, the share of transportation of uranium products along the Trans-Caspian International Transport Route in 2023 has increased significantly. 64% of all uranium shipments from Kazakhstan to Western countries were transported along this transit corridor.

    In addition, the Head of State was informed about the ongoing investment projects of the Kazatomprom group of companies, as well as socially significant projects aimed at developing and supporting the regions of presence.

    The President was also informed about the work to expand and replenish the mineral resource base.

    Following the meeting, the Head of State gave a number of specific instructions to improve the efficiency of Kazatomprom.