MINEX Forum

Region: Kazakhstan

  • Uranium stocks extend surge after Kazakh miner cuts output

    Uranium stocks extend surge after Kazakh miner cuts output

    Uranium miners extended a rally that’s made them the best-performing Australian stocks this year after the world’s biggest producer of the metal used to produce nuclear fuel cut its output target.

    Kazatomprom lowered its guidance for production for this year by 12% to 14%. The company, listed in London and controlled by the Kazakhstan government, had warned in January that it was likely to fall short of its output goals over the next two years.

    Paladin Energy Ltd. shares jumped as much as 7.4% in Sydney and Boss Energy Ltd. was up as much as 8.1%. A couple of smaller miners surged even more: Deep Yellow Ltd., which has projects in Australia and Namibia, soared more than 18%, while Bannerman Energy Ltd. climbed as much as 8.3%.

    The production warning is the latest in a series of supply setbacks — including a coup in Niger last year that disrupted shipments to Europe — that have pushed spot uranium prices to 15-year highs. That’s happening amid a revival of interest in nuclear power as governments try to decarbonize their economies to meet net zero targets.

    The reduction in output from Kazakhstan “just leaves the market in even more of a deficit than it already is,” said Matt Griffin, co-portfolio manager of Australian small companies at Maple Brown Abbott Ltd. There’s unlikely to be any impact on Australian production, but “prices are going to be higher across the board,” he said.

    Boss Energy and Paladin, both based in Perth, are the two best-performing stocks on Australia’s benchmark S&P/ASX 200 Index this year, rising 48% and 39%, respectively.

    Uranium miners in other parts of the world also rose following the Kazatomprom announcement. CGN Mining Co. advanced as much as 8.2% in Hong Kong, while Cameco Corp. closed up 5.9% in New York on Thursday. The Global X Uranium ETF, which tracks the performance of several miners, jumped 6.2% on Thursday to the highest level since 2014.

  • A polymetallic deposit will be developed in the Karaganda region

    A polymetallic deposit will be developed in the Karaganda region

    OralElectroService will resume production at the Uzynzhal polymetallic deposit, located in the Shet district of the Karaganda region. The site was developed in 2018–2019, after which work was suspended for additional geological exploration. The subsoil user posted the updated mining plan on the Unified Environmental Portal of Kazakhstan.

    The company calculated the parameters for the development of Uzynzhal for 10 years – from 2024 to 2033. During this period, the deposit will be mined using open-pit mining; in subsequent years, a transition to underground mining will be required. The design capacity of the quarry is 500 thousand tons of polymetallic ores per year.

    According to the material composition of the ores of the deposit, they are classified as zinc-lead. Lead content ranges from 0.02% to 31.8% with an average of 2.73%. The average zinc content, in turn, reaches 1.2%. In addition to these two metals, the ores contain other components valuable for extraction: silver (average 41.4 g/t), cadmium (0.017%) and barite (9.6%).   

    The reserves of all balance ores at the site (oxidized, mixed and sulfide) amount to 12,500 thousand tons. Most likely, the raw materials will be processed at their own processing plant. The design documentation notes that recommendations for the technical regulations for the design of the processing plant were drawn up on the basis of a study of the properties of ores in 2010−2011.

  • Polymetal clarified the timing of the launch of underground mining at the Bakyrchik gold deposit

    Polymetal clarified the timing of the launch of underground mining at the Bakyrchik gold deposit

    It will begin in 2035, and preparations for it five years earlier.

    Polymetal will switch to underground mining at the Bakyrchik gold deposit in the Abay region in 2035. The head of the company, Vitaly Nesis, announced this during an online conference on production results for 2023 and its fourth quarter. Open pit mining at Bakyrchik has been carried out by Polymetal under the auspices of the Kyzyl project since 2018.

    “We planned to actually start underground ore mining at Bakyrchik in 2035. But the project itself will begin in 2030 in terms of building the surface infrastructure for the underground mine and the development workings that will be required to access the ore. I think it will last more than four years. Thus, despite the fact that from the point of view of total capital expenditures, the expenses will be very significant – presumably the current estimate is $200-250 million, they will not be critical from the point of view of the amount of total capital investments,” explained the head of Polymetal, commenting on the issue in business. kz.

    Let us remind you that earlier the media reported that Polymetal intends to begin the underground mining stage at Bakyrchik in 2030, in addition, other dates were announced – 2031.

    During his speech at the online conference, Vitaly Nesis also said that in addition to searching for objects for subsoil use in Kazakhstan, where the company may be interested in deposits of base metals – copper, zinc, lead, tin, Polymetal is now engaged in a country analysis of possible projects in Tajikistan. A similar assessment has already been carried out for Uzbekistan and Kyrgyzstan, however, nothing suitable has been found there yet.

    As is known, Chinese companies dominate the mining sector in Tajikistan. More than ten years ago, Kazzinc tried to enter there through a tender for the Bolshoi Konimansur silver deposit. This spring, Polymetal management plans to travel to the mountainous republic again to visit subsoil use facilities; perhaps, already in the third quarter it will become known about any projects in this country.

    As for Russian assets, the gold mining company plans to part with them by the end of the first quarter, as was promised to the Kazakh authorities; now there is a potential buyer for this within the Russian Federation. In Russia, the company continues to have difficulties with the sale of finished product reserves; a significant tightening of control over the export of precious metals has led to the accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in seaports, Polymetal indicated in a release for the past quarter.

    “Our Russian subsidiary continues to make efforts to convert inventory into sales in Russia, which also affects sales from Kazakhstan, since a significant portion of the concentrate from Kyzyl is sold as a mixture with pure Russian concentrate. As a result, we are seeing an accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in all directions in seaports. We continue to hope that this issue will be resolved in the first half of this year, obviously with a particular focus on Kyzyl. We inadvertently expect that the concentrate from Kyzyl this year will be much purer and will not require as much mixing as in 2023,” said Vitaly Nesis during a conference call.

    Let us remind you that high-carbon concentrate from Kyzyl is exported to China. In October, inbusiness.kz wrote that Polymetal faced logistical challenges when delivering gold-containing raw materials from Kyzyl to the Far Eastern harbors.

    It should be noted that in 2023, production at Kyzyl decreased to 316 thousand ounces of gold, 4% less than the 2022 production figure of 330 thousand ounces. The company explains this by a decrease in the content of precious metal in the ore of the deposit. When switching to underground mining, it can increase by 20-25%, Nesis believes.

    The decline in production at the Varvarinsky hub in the Kostanay region was even greater – by 20% from 211 thousand ounces in 2022 to 169 thousand ounces in 2023, which “is due to the lower content of Komarovsky ore in the cyanidation area and a decrease in the share of high-quality third-party ore in raw materials at the flotation section,” as specified in the Polymetal release. In total, the company produced 486 thousand ounces (approximately 15.1 tons) in Kazakhstan last year, which can hardly be called achieving the previously planned figure of half a million ounces. By the way, in the context of the unclear prospect of the withdrawal of capital expected from the upcoming sale of Russian mines and the planned capital expenditures for the Irtysh MMC, Polymetal was not able to completely free itself from the debt load of its Kazakh assets – at the end of 2023 they reached $171 million.

    Meanwhile, the cost of gold production in Kazakhstan began to be strongly influenced by tariffs for electricity and freight transportation by rail, growing from year to year.

    “The Company expects cash costs (TCC) of US$ 900 – 1,000 and all-in cash costs (AISC) of US$ 1,250 – 1,350 per gold equivalent ounce. The increase compared to the previous year is mainly due to a sharp increase in tariffs for electricity and rail transportation in Kazakhstan,” the final release states.

    Commenting on the publication’s questions about how the growing tariffs of KTZ and the electric power industry will affect the cost of production in Kazakhstan in the next five years, Vitaly Nesis noted that the company is not particularly trying to analyze tariffs on the railway due to uncertainty, but in energy supply it plans ensure your own generation.

    “From an electricity perspective, we believe tariffs will rise in real terms by at least 20% per annum over the next five years. Therefore, we continue to invest in our renewable energy facility: solar energy plus gas (gas piston station – approx.) at Varvarinsky, and then we have plans to do the same at Kyzyl. The only way to avoid significant increases in electricity prices in Kazakhstan is to switch from expensive coal power to renewable energy sources, which are much cheaper and more environmentally friendly, and this is our strategy in this regard,” Nesis noted.

    PS This material was adapted on February 2, 2024 at 18.30 after receiving updated information that the subsoil use contract for the Bakyrchik gold deposit was extended until December 31, 2030.

  • Polymetal transferred Bakyrchik from a mining contract to a license

    Polymetal transferred Bakyrchik from a mining contract to a license

    The subsoil use agreement for the gold deposit in the Abay region expired in July 2023.

    Polymetal transferred the Bakyrchik gold deposit in the Abay region from a mining contract for subsoil use to a license. The head of the company, Vitaly Nesis, announced this during an online conference on production results for 2023 and its fourth quarter. Mining at Bakyrchik has been carried out by Polymetal under the auspices of the Kyzyl project since 2018.

    “The subsoil use contract has expired. In fact, Bakyrchik now has a license. For the last three or four years, I think, it has been possible to exploit the subsoil in Kazakhstan either under the previous system of contracts or under the new system of licenses. We decided that we would try to do as many licenses as possible, and Bakyrchik actually switched to a license last year.” – said the top manager, commenting on the question from inbusiness.kz.

    According to the list of existing contracts for subsoil use of the Ministry of Industry, the agreement for Bakyrchik was issued in 1997 and ended in July 2023. The publication’s correspondent was unable to find a new license for this field in the register of the industry department, which was last updated in June last year, although previously it was updated with fresh data much more often.

    In addition, commenting on questions from inbusiness.kz, Nesis clarified the timing of the launch of underground mining at Bakyrchik.

    “We planned to actually start underground ore mining at Bakyrchik in 2035. But the project itself will begin in 2030, in terms of building the surface infrastructure for the underground mine and the development workings that will be required to access the ore. I think it will last more than four years. Thus, despite the fact that in terms of total capital expenditures the costs will be very significant – presumably the current estimate is $200-250 million, they will not be critical in terms of the amount of total capital investments,” explained the head of Polymetal.

    During his speech at an online conference, Vitaly Nesis said that, in addition to searching for objects for subsoil use in Kazakhstan, where the company may be interested in deposits of base metals – copper, zinc, lead, tin, Polymetal is now engaged in a country analysis of possible projects in Tajikistan. A similar assessment has already been carried out for Uzbekistan and Kyrgyzstan, but nothing suitable has yet been found there.

    As is known, Chinese companies dominate the mining sector in Tajikistan. More than ten years ago, Kazzinc tried to enter there through a tender for the Bolshoi Konimansur silver deposit. This spring, Polymetal management plans to travel to the mountainous republic again to visit subsoil use facilities; perhaps, already in the third quarter it will become known about any projects in this country.

    As for Russian assets, the gold mining company plans to part with them by the end of the first quarter, as was promised to the Kazakh authorities; now there is a potential buyer for this within the Russian Federation. In Russia, the company continues to have difficulties with the sale of finished product reserves; a significant tightening of control over the export of precious metals has led to the accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in seaports, Polymetal indicated in a release for the past quarter.

    “Our Russian subsidiary continues to make efforts to convert inventory into sales in Russia, which also affects sales from Kazakhstan, since a significant portion of the concentrate from Kyzyl is sold as a mixture with pure Russian concentrate. As a result, we are seeing an accumulation of concentrates from Kyzyl, Albazino, Nezhdaninsky, Vorontsovsky and Maysky in all directions in seaports. We continue to hope that this issue will be resolved in the first half of this year, obviously with a particular focus on Kyzyl. We inadvertently expect that the concentrate from Kyzyl this year will be much purer and will not require as much mixing as in 2023,” Vitaly Nesis said during a conference call.

    Let us remind you that high-carbon concentrate from Kyzyl is exported to China. In October, inbusiness.kz wrote that Polymetal faced logistical challenges when delivering gold-containing raw materials from Kyzyl to the Far Eastern harbors.

    It should be noted that in 2023, production at Kyzyl decreased to 316 thousand ounces of gold, 4% less than the 2022 production figure of 330 thousand ounces. The company explains this by a decrease in the content of precious metal in the ore of the deposit. When switching to underground mining, it can increase by 20-25%, Nesis believes.

    The decline in production at the Varvarinsky hub in the Kostanay region was even greater – by 20%, from 211 thousand ounces in 2022 to 169 thousand ounces in 2023, which “is due to lower grades in Komarovsky ore at the cyanidation site and a decrease in the share of high-quality third-party ore in the feedstock at the flotation section,” as specified in the Polymetal release. In total, the company produced 486 thousand ounces (approximately 15.1 tons) in Kazakhstan last year, which can hardly be called achieving the previously planned figure of half a million ounces. By the way, in the context of the unclear prospect of the withdrawal of capital expected from the upcoming sale of Russian mines, and the planned capital expenditures for the Irtysh MMC, Polymetal was not able to completely free itself from the debt load of its Kazakh assets – at the end of 2023 they reached $171 million.

    Meanwhile, the cost of gold production in Kazakhstan began to be strongly influenced by tariffs for electricity and freight transportation by rail, growing from year to year.

    “The Company expects TCC to be US$900-1,000 and AISC to be US$1,250-1,350 per GE ounce. The increase compared to the previous year is mainly due to a sharp increase in tariffs for electricity and rail transportation in Kazakhstan,” the final release states.

    Commenting on the publication’s questions about how the growing tariffs of KTZ and the electric power industry will affect the cost of production in Kazakhstan in the next five years, Vitaly Nesis noted that the company is not particularly trying to analyze tariffs on the railway due to uncertainty, but in energy supply it plans ensure your own generation.

    “From an electricity perspective, we believe tariffs will rise in real terms by at least 20% per annum over the next five years. Therefore, we continue to invest in our renewable energy facility: solar energy plus gas (gas piston station – Note) at Varvarinsky, and then we have plans to do the same at Kyzyl. The only way to avoid significant increases in electricity prices in Kazakhstan is to switch from expensive coal power to renewable energy sources, which are much cheaper and more environmentally friendly, and this is our strategy in this regard,” Nesis noted.

  • Unmanned dump trucks will be launched at one of the coal mines in Kazakhstan

    Unmanned dump trucks will be launched at one of the coal mines in Kazakhstan

    At the Vostochny coal mine in the city of Ekibastuz, unmanned dump trucks will be tested this year. Serik Shakhazhanov, General Director of the Eurasian Resources Group (ERG) in Kazakhstan, announced this at the Digital Almaty 2024 forum: “Industry X: digital evolution of the future,” a Kazinform agency correspondent reports.

    — In 2024, we will pilot three unmanned dump trucks at the Vostochny open-pit coal mine. This year we want to transport a million cubic meters of rock mass by drones. By 2027, we want to transport 115 million tons of rock mass by drones. All these products were created by specialists from our division; we employ about a thousand IT specialists,” he said.

    The speaker also invited the Ministry of Digital Development, Innovation and Aerospace Industry to jointly test a project to switch to unmanned dump trucks.

    — I wanted to suggest to the ministry that we are ready to become the platform on which we can experiment and look from the point of view of industrial safety and IT legislation: what is an unmanned vehicle at an industrial facility, what are the necessary requirements for an unmanned vehicle to drive and produce volume, for the sake of which it is done. By 2027, we plan to transfer one quarry completely to unmanned dump trucks,” said Serik Shakhazhanov.

    He noted that the company began a digitalization program in 2020, and since 2021, investments in innovative technologies have amounted to $120 million.

  • Kazakhstan is introducing strategic environmental assessment in the development of plans and programs

    Kazakhstan is introducing strategic environmental assessment in the development of plans and programs

    In Kazakhstan, on January 1, 2024, the Environmental Code norm on conducting a strategic environmental assessment (SEA) during strategic planning came into force.

    It should be noted that SEA is a proactive tool that solves, first of all, the causes of environmental problems, and not just their symptoms, which ensures that environmental tasks, as well as tasks related to sustainable development, are taken into account in the early stages of planning (territorial development programs and master plans of settlements).

    This method is already in practical use in Eastern Europe, the Caucasus and Central Asia.

    The Ministry of Ecology and Natural Resources of the Republic of Kazakhstan, together with the German Society for International Cooperation (GIZ), within the framework of the regional project “Environmentally oriented regional development of the Aral Sea region” (financed by GIZ), organized training seminars on SEA for Central government bodies and non-governmental organizations.

    During the event, event participants had the opportunity to become familiar with the concept and benefits of SEA as a tool for improving sectoral planning and promoting the principles of sustainable development.

    In addition, experienced experts presented as an example international experience and the results of pilot projects completed in the Republic of Kazakhstan in accordance with the requirements of the current Environmental Code of the Republic of Kazakhstan. The roles of line ministries and departments in the planning process and the possibilities for improving the planning system were also noted.

    Participants who completed the full training course received personalized GIZ certificates.

  • Amendments have been made to the Subsoil Code: new rules for subsoil use in Kazakhstan from January 1, 2024

    Amendments have been made to the Subsoil Code: new rules for subsoil use in Kazakhstan from January 1, 2024

    The Code “On Subsoil and Subsoil Use” has been amended to paragraph 6, subparagraph 16) of paragraph 14 of Article 277 and paragraph 10 of Article 278, which came into force on January 1, 2024.

    According to the adopted amendments, the competence of the State Reserves Committee to conduct the State Expertise of Subsoil in terms of hydrocarbons is extended until January 1, 2026. After January 1, 2026, this function will be assigned to the Central Commission for Hydrocarbon Reserves of the Republic of Kazakhstan under the authorized body in the field of hydrocarbons (ME RK).

    Regarding solid minerals (including common minerals), it should be noted that significant changes have been made, despite the fact that before the adoption of the Law, the State Reserves Committee and the Interregional Commissions on Reserves (hereinafter referred to as the IRC) were valid until January 1, 2024.
    According to the amendments made, the State Reserves Committee and the Mineral Reserves Act are valid on an ongoing basis in relation to production contracts or licenses for the production of solid minerals (including common minerals) concluded or issued before December 31, 2023.
    Subsoil users who entered into exploration contracts and licenses before January 1, 2024 will submit reports in accordance with KAZRC standards for inclusion in state accounting
    For questions regarding the preparation of a report by a competent person in accordance with the Kazakhstan Code of Public Reporting on the results of geological exploration, mineral resources and mineral reserves, please contact info@ponen.kz.

  • Kazakhmys proposed support measures for metallurgists

    Kazakhmys proposed support measures for metallurgists

    Investment programs to expand existing metallurgical production and launch new ones should be a priority for Kazakh development institutions. The management of the Kazakhmys Corporation made such a proposal at a meeting of the Council of Domestic Entrepreneurs. The press center of the Association of Mining and Metallurgical Enterprises of the Republic writes about this.

    Chairman of the Board of Kazakhmys Nurakhmet Nuriev noted that projects aimed at increasing the production of metal products should be among the priority projects that receive financial support from the Development Bank of Kazakhstan, Baiterek, the Industrial Development Fund of the Republic of Kazakhstan and other organizations.

    According to Mr. Nuriev, last year the consumption of metals in the manufacturing industry decreased compared to 2022. Experts emphasize that the situation with the shortage of domestic raw materials for enterprises could not be improved through discounts for individual manufacturers.

    In return, Kazakhmys management proposes to establish general discounts on metals for the manufacturing industry. The measure should help the development of metallurgical clusters and the production of metal products with high added value.

    Let us remind you: in the manufacturing industry of Kazakhstan in 2024 they want to implement 180 investment projects worth 1.5 trillion tenge.

  • Polymetal enterprises in the Republic of Kazakhstan produced 486 thousand ounces of gold equivalent

    Polymetal enterprises in the Republic of Kazakhstan produced 486 thousand ounces of gold equivalent

    In 2023, Polymetal’s assets in the Republic of Kazakhstan – Kyzyl and Varvarinskoye – brought in 486 thousand ounces in gold equivalent. The production of precious metals decreased by 10% compared to the year before, follows from the report of the gold mining company.

    Polymetal’s total production was 1.7 million ounces. The company achieved almost the same result in 2022.

    At the Bakyrchik deposit (Kyzyl project) in 2023, gold ore production increased by 9% – to 2.43 thousand tons. However, due to the fact that the subsoil user is now extracting ores with a lower precious metal content, gold production has decreased decline In total, the asset produced 316 thousand ounces (−4% for the year).

    At the deposits of the Varvarinsky hub – Varvarinsky and Komarovsky – production fell from 3.86 thousand to 2.83 thousand tons. Ore processing remained almost at the level of last year. The total volume of precious metal issued decreased, according to plan, to 169 thousand ounces (−20% year-on-year).

    The Amur MMC increased its capacity to 66 thousand tons. In 2022, the enterprise processed 37% less ore.

    The gold miner’s revenue exceeded $3 billion. In annual terms, the figure increased by 8%, but only due to Polymetal’s assets in the Russian Federation. The Kyzyl and Varvarinskoye projects, in turn, brought the manufacturer $893 million – 4% less when compared to the year before.

    In 2024, Polymetal will make a final decision on the development of the Irtysh MMC. A site has already been allocated for the plant in the SEZ near Pavlodar. The company expects that this year the production of precious metals at Kazakh assets will remain at the 2023 level.

  • Kazakhmys will allocate more than 15.5 billion tenge for the development of the Ulytau region in 2024

    Kazakhmys will allocate more than 15.5 billion tenge for the development of the Ulytau region in 2024

    As part of the memorandum, Kazakhmys Corporation LLP will finance 30 social projects implemented this year in the Ulytau region in the areas of education, healthcare, sports, infrastructure development and human capital. The total cost of the projects being implemented is more than 15.5 billion tenge.

    Major projects for 2024 are: construction of a sports and recreation center for 320 seats in the city of Zhezkazgan, construction of the embankment of the Kengir reservoir, construction of a mosque, construction of a kindergarten for 280 places in the city of Zhezkazgan, major renovation of the Akbota kindergarten in the city of Satpayev, reconstruction of the Shakhterskaya square glory in the city of Satpayev, reconstruction of Metallurgists Square in the city of Zhezkazgan, etc.

    In 2023, the company allocated 11 billion tenge for the implementation of 30 projects. Of these, 14 projects were successfully completed. Among them: the acquisition and renovation of a building for a day care center for disabled children, renovation of a secondary school named after. S. Seifullina in the city of Satpayev, Development of design documentation “Modernization of groundwater intake structures of the Eskulinsky deposit”, opening of the Ulytau football club, etc. The implementation of the remaining 16 major projects will continue this year.