MINEX Forum

Region: Kazakhstan

  • How does the environmental agenda affect Kazakhstan’s industry?

    How does the environmental agenda affect Kazakhstan’s industry?

    The adoption of ESG principles, encompassing environmental, social, and corporate governance aspects, is gaining momentum worldwide, and Kazakhstan is no exception. According to inbusiness.kz, major manufacturing companies in the country are actively modernizing their facilities, implementing measures to reduce emissions, and promoting waste recycling practices.

    By incorporating ESG principles into their operations, companies can not only improve their environmental impact but also enhance their social and managerial aspects, ultimately leading to improved financial and economic performance. Natalya Lim, a partner at PwC, emphasizes the urgent need for a global and unified approach to address critical issues such as climate change, poverty, inequality, and water scarcity.

    Lim believes that the corporate sector plays a decisive role in overcoming these challenges, and organizations in Kazakhstan are demonstrating their readiness to take responsibility and drive positive changes. In the industrial sector, companies like “KazMunaiGaz” are leading the way by adopting their own “Low Carbon Development Program for 2022-2031.” The objective of this program is to reduce greenhouse gas emissions by 15% by 2031 compared to the baseline year of 2019.

    Moreover, “KazMunaiGaz” is actively collaborating with partners to develop renewable energy projects with a total capacity of at least 1 gigawatt, along with an energy storage system of 300/600 megawatts. These efforts reflect the commitment of Kazakhstani companies to sustainable development and their contribution to mitigating environmental challenges while driving economic growth.
    Another industrial giant, Eurasian Resources Group, is actively working on reducing emissions at its facilities and minimizing their environmental impact. For instance, on August 10th, they showcased a unique ore processing plant for handling the tailings of the Donskoy Mining and Processing Plant to the Prime Minister of Kazakhstan, Alihan Smailov. This plant was built by the multinational company “Kazchrome” (a subsidiary of ERG) in the city of Khromtau, Aktobe region.

    Why is this project important? The Donskoy Mining and Processing Plant was founded in 1938 in Khromtau and is the world’s second-largest deposit of confirmed chromium reserves. The ore extracted here is used for the production of ferroalloys in metallurgy, the manufacturing of refractories, and in the chemical industry for producing chromium compounds.

    Every year, in the process of crushing and grinding chromium ore at the plant, around 900,000 tons of tailings waste are generated. Currently, there are already 14.5 million tons of accumulated tailings containing up to 35% chromium oxide. “Kazchrome” decided to address this issue by constructing the ERG Green ore processing plant.

    This plant will enable the extraction of chromium oxide from the tailings through gravity-based enrichment, and the resulting commercial concentrate can be used in metallurgy for further processing.

    The new facility will allow for the processing of approximately 1.7 million tons of tailings annually, both the existing waste and the continuously generated new waste. Consequently, this will not only improve the environmental conditions in the Aktobe region but also enhance the economic efficiency of the plant itself.

    “The most important thing is that after processing, the tailings must be properly reclaimed in accordance with all environmental standards to minimize the impact on the environment and public health,” commented Alihan Smailov during his visit to the factory.

    In parallel with this, by the end of 2024, as part of the program for processing accumulated tailings, three more initiatives are planned to be implemented. As a result, ERG will ensure the production of 200,000 tons of ferrochrome, leading to an additional revenue of approximately 10 billion tenge in tax receipts annually for the state.

    “Following the company’s mission and ESG principles, management must ensure high environmental standards. Therefore, the group has developed an Environmental Strategy as part of our comprehensive ‘Green Metallurgy’ program. Within the environmental strategy until 2030, we plan to invest 228 billion tenge,” noted Shuhrat Ibragimov, Chairman of the Supervisory Board and member of the Board of Directors of ERG, during the project presentation.

    Investors are involved in the process
    Initiatives like these require substantial investments, and modernizing existing facilities or building new ones is difficult without the assistance of investors.

    For example, the total investment in the ERG Green plant project amounted to 96 billion tenge. Part of the funding was provided by the Development Bank of Kazakhstan, which, according to the project list, has actively begun working in the ESG direction.

    “We consider supporting projects that adhere to the principles of sustainable development to be important. This project aligns with the Environmental Code’s principles of sustainable development – the preservation of natural resources for current and future generations, as well as the principle of integration – the balance between environmental tasks and economic development,” commented Marat Yelibaev, Deputy Chairman of the Board of BRK.

    Like other development institutions, the Development Bank of Kazakhstan is focusing on projects that incorporate ESG principles into their operations. For instance, earlier this year, the bank issued its first “green” bonds, and the proceeds from the bond issuance were directed towards a project by the KEGOC company for modernizing the power grids in Western Kazakhstan.

    In the summer, a credit agreement was signed with the “Almaty Power Plants” to convert TEC-2 in Almaty to natural gas. This project will be financed jointly with the European Bank for Reconstruction and Development and the Asian Development Bank.

    From the example of BRK and other financial institutions, a clear trend is emerging: ESG initiatives of businesses are of interest to investors. This signals that in the near future, many more environmental projects will be implemented by industrial and infrastructure companies.

  • The Ministry of Industry of Kazakhstan has published several subsoil use contracts

    The Ministry of Industry of Kazakhstan has published several subsoil use contracts

    The Ministry of Industry and Infrastructure Development of Kazakhstan has published several electronic versions of subsoil use contracts, particularly for solid minerals, for the convenience of subsoil users. This documentation is available on the ministry’s website without detailed appendices, such as work programs, according to inbusiness.kz.

    Since the beginning of June, the relevant ministry has published 12 subsoil use contracts, including those for gold extraction at the Maikain “C” deposit (Pavlodar Region), copper-molybdenum ores at the Shatyrkul deposit (Zhambyl Region), copper and polymetallic ores at the Sokyrkoy deposit (Karaganda Region), gold-copper-polymetallic ores at the Abyz deposit (Karaganda Region), polymetallic ores at the Akbastau deposit (now Abay Region), copper ores at the Konrad, Sayak-1, and Tastau deposits (Karaganda Region), copper-containing ores of the Zhilandy group deposits (now Ulytau Region), polymetallic ores at the Kosmurun deposit (now Abay Region), the development of the Zhezkazgan copper ore deposit (now Ulytau Region), exploration and extraction of copper, gold, and associated metals on the territory of the Zhezkazgan Basin within the Sorukduk-Zhartas, Prisarysuisky, and Zhaman-Aibat sites (now Ulytau Region), exploration and development of the Nurkazgan gold-copper ore deposit (Karaganda Region), as well as exploration of copper, gold, and by-product components in the Spasskoye copper ore zone (Karaganda Region).

    In the press service of the Ministry of Industry, inbusiness.kz explained that the contracts are being published at the request of the Subsoil Use Department to facilitate the use of subsoil resources.

    Earlier in July, echo.kz reported that the former Ministry of Industry and Infrastructure Development had begun publishing subsoil use contracts for solid minerals. These contracts were disclosed with tracking changes but without appendices, according to the public association “Echo.” At the beginning of June, 11 subsoil use contracts for solid minerals were disclosed at that time.

    Civil society in Kazakhstan, particularly those involved in the Extractive Industries Transparency Initiative (EITI), played an important role in the publication of this data. They have engaged in negotiations with representatives of government bodies for a long time, advocating for the publication of contracts in line with the requirements of the EITI and Kazakh legislation, according to a statement from the non-governmental organization.

    Based on publicly available information, Kazakhstan has hundreds of subsoil use contracts for solid minerals, so the Ministry of Industry and Infrastructure Development still has a substantial amount of work ahead to publish them. The correspondent from inbusiness.kz could not find any published contracts for uranium, oil, and gas extraction on the Ministry of Energy’s website.

  • The First Deputy Prime Minister of Kazakhstan, Roman Sklyar, visited the Bestobe deposit

    The First Deputy Prime Minister of Kazakhstan, Roman Sklyar, visited the Bestobe deposit

    A delegation of state authorities, led by First Deputy Prime Minister Roman Sklyar, paid a visit to the Bestobe deposit. The purpose of the visit was to oversee the ongoing efforts to resume underground mining operations, as outlined in the developed roadmap.

    According to the latest reports, the process of pumping water out of the mine has been in progress since August 21 of this year. As of now, a substantial amount of 225,000 cubic meters of water has been successfully removed from the mine. It is estimated that approximately 1.3 million cubic meters of water still remain to be pumped out.

    A dedicated team of 417 individuals has been diligently working on this task. Additionally, every effort is being made to secure alternative employment opportunities for the mine’s employees during this period.

    With the significant progress made thus far, it is expected that the mine’s operations will resume in the near future. The Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan is closely monitoring this matter, ensuring its special supervision.

  • ERG’s subsidiary will engage in geological exploration in the Karaganda Region

    ERG’s subsidiary will engage in geological exploration in the Karaganda Region

    The ERG Exploration Company (a subsidiary of ERG) will be engaged in geological exploration on 2,800 hectares in the Aktogay District of the Karaganda Region.

    “The Akimat (local government) of the Aktogay District resolves: 1. To establish a public servitude (limited right to use someone else’s land) until August 23, 2029, without expropriating the land from the owners and land users of the limited liability company ‘ERG Exploration’ for a land plot with a total area of 2,813.7667 hectares for mineral exploration, as specified in the annex to this resolution,” states the draft resolution of the Aktogay District Akimat in the Karaganda Region, posted for public discussion.

    The majority of the land is part of the district’s land fund – 1,232.5 hectares, while the remaining lands belong to the “Dauletbek” farm – 712.3 hectares and the “Beksultan” farm – 868.9 hectares.

    The General Director of ERG Exploration, Azamat Shalabayev, informed journalists at a geologists’ congress about plans for exploring new areas in the republic.

    “We have a large program for digitizing geological material archives. We have created separate groups for specific directions, which are separately searching for our profile metals – searching for chrome, manganese, and there are groups dealing with other metals, including copper, polymetals, as well as RM (rare metals) and REM (rare earth metals). So, we will be searching in this direction, and the management sets us the task of finding new metals that are not typical for our group,” he said.

    Shalabayev reminded that on August 1, the company won the right to explore a copper area in Northern Pri-Balkhash at an auction, paying more than 420 million tenge. Geological research was carried out there during the Soviet era, and later jointly by Rio Tinto and “Kazgeology.” The area was studied to a depth of 200 meters. The study showed estimated resources of up to 200,000 tons of copper, but with a low metal content in the ore – 0.2-0.3%. ERG plans to study the area to a depth of 700 meters in hopes of finding valuable minerals.

    The British-Australian company Rio Tinto conducted geological exploration, searching for copper in the Korgantas and Balkhash-Saryshagan areas in the Karaganda Region since 2015. However, the geological exploration of Korgantas did not yield significant results, so the subsoil use contract was terminated.

    ERG’s ultimate owners are the Ministry of Finance – 40%, Alexander Machkevitch and the Ibragimov family – 20.7% each, and Patokh Shodiev – 18.6%. Alexander Machkevitch, Patokh Shodiev, and the family of the late Alijan Ibragimov (the spouse of Mukadas Khan Ibragimov and four sons, Dostan, Davron, Shukhrat, and Furkhat) became the first dollar billionaires in Kazakhstan according to Forbes in 2005 with a capital of $1 billion each. Later, Alexander Machkevitch and Patokh Shodiev changed their citizenship from Kazakhstani to Israeli and Belgian, respectively. The Chairman of the Board of Directors and a major shareholder of Eurasian Resources Group, Alexander Machkevitch, was ranked sixth among the richest Israelis with $3.7 billion in Forbes’ rating last year.

  • Kazatomprom to end uranium production cuts in 2025

    Kazatomprom to end uranium production cuts in 2025

    “Kazatomprom remains committed to its market-centric strategy and its disciplined approach to production and sales, and we’re excited to witness the start of a long-awaited historical shift in the uranium market,” Dastan Kosherbayev, chief commercial officer of Kazatomprom, said in a statement.
    “As we are seeing a clear sign that the industry has entered into the new long-term contracting cycle, driven by the recognition of the restocking needs, Kazatomprom, with its best-class and lowest cost mines, is absolutely prepared to respond to these improving market conditions”.

    The spot price of uranium has more than doubled over the past three years, although it is still well down from a peak of $140 a pound touched in 2007.

    For seven years including 2023, the company has produced 20% less than its contracts with the Kazakh government allowed, with this year’s output seen at 20,500-21,500 tonnes.

    In 2024, Kazatomprom said it would stick to its plan to produce 10% below the contract maximum, or 25,000-25,500 tonnes, while with no restrictions in 2025, production is expected to grow to 30,500-31,500 tonnes, the company said.

    “…Our intention to return to a 100% level of Subsoil Use Contracts production volumes in 2025 is primarily driven by our strong contract-book and already growing sales portfolio against conservative 2023-2024 production scenario,” Kosherbayev said.

  • Kazakhstani National Geological Servey will receive assistance in avoiding mistakes

    Kazakhstani National Geological Servey will receive assistance in avoiding mistakes

    The British Geological Survey, with its extensive experience, will share its knowledge with its Kazakhstani counterparts. The collaboration between the British Geological Survey (BGS) and the National Geological Service (NGS) of Kazakhstan is set to be closely coordinated. During his visit to Astana, David Schofield, the director of BGS for international geological research, shed light on this international partnership.

    “The British Geological Survey is the world’s oldest organization of its kind. Our primary focus involves describing the geology of the United Kingdom, generating geological information, and disseminating it to stakeholders interested in natural resources. This includes data on water resources, construction-related information, as well as potential hazards like landslides. Consequently, we collaborate with various industries. Furthermore, we have a strong tradition of sending our geologists abroad to enhance geological services in other countries. The primary motivation behind our international efforts is global development and supporting the implementation of British trade and foreign policy,” shared the geologist.

    During their visit to Kazakhstan, BGS specialists engaged in fruitful discussions with their counterparts from the recently established National Geological Service of Kazakhstan.

    “The organization is relatively young and faces several challenges that need to be addressed. However, they have made a promising start. One area where we can offer assistance is in the digital transformation of a substantial amount of accumulated data. We can help bring this data into the digital realm and make it more accessible to a wider audience. We have accumulated considerable experience in this domain over the past 25 years, learning valuable lessons along the way. By sharing our experience, we hope that the NGS of Kazakhstan can avoid the mistakes we’ve unfortunately made. Additionally, we possess expertise in ore deposit analysis, hydrology, and other challenges, where our knowledge can be of value,” noted the specialist.

    Currently, the collaborating geological organizations are actively discussing potential areas of cooperation. Recognizing their shared objectives, BGS and NGS intend to establish a working plan for the next two to three years.

    According to the minerals.gov.kz website, the British Geological Survey plans to collaborate with “Kazakhstan Garish Sapary,” which operates a geological IT platform, as reported by inbusiness.kz.
    In the course of their conversation, the head of the National Geological Service (NGS) elucidated that this subsidiary of the geological committee acts as the national custodian of the state’s accumulated geological data. However, it does not possess any deposits, assets, or laboratories.

    Concerning the fees for the services provided by the National Geological Service, Erlan Galiev clarified that the pricing methodology is presently under discussion within the organization. He underscored that the calculation will now be based on the number of pages in the report, rather than solely on the report itself.

    “There are various approaches to assessing geological information. For instance, one could commence with historical expenses. Let’s say, back in the 1970s, an expedition was dispatched, wells were drilled, various operations were conducted, money was expended, and this report was created, subsequently submitted to the funds. Now, let’s assume we propose that 1% of the total cost of these activities should be the price of this report. It would not be just a million; considering the inflation that has transpired since then, it would be exorbitantly high, excessively expensive. We will not tread down that path, but merely for your comprehension, the value ascribed to geological information presently is abysmally low, simply catastrophic. The actual expenditure incurred far exceeds what a mining user pays for this report at present, rendering it a rather meager amount, allowing them to utilize the information freely. Therefore, we are currently contemplating and acknowledging that the provision of geological information should be streamlined, transparent, and expedited as much as possible. We are diligently working towards that goal,” expounded the esteemed NGS executive.

  • Kazakhstan Chamber of Mines Established to Foster Responsible Mining Practices and Investment Climate

    Kazakhstan Chamber of Mines Established to Foster Responsible Mining Practices and Investment Climate

    Almaty, Kazakhstan, September 20, 2023. In a historic moment that signals a pivotal shift within the Kazakhstan mining industry, the Kazakhstan Chamber of Mines is pleased to declare the official launch of its operations. This occasion marks the initiation of our commitment to advocate for responsible mining practices and cultivate an investment-friendly environment for all stakeholders of the Kazakhstan minerals industry.

    By fostering cooperation and advocating for policies that prioritize responsible mining practices, the chamber seeks to create a thriving and sustainable mining sector in Kazakhstan that brings lasting benefits
    to the nation and its people.

    Our vision is to assist and promote the mining industry of Kazakhstan in becoming widely respected as a safe, environmentally responsible, globally competitive, and significant contributor to the long-term
    prosperity of Kazakhstan. In doing so, we hold ourselves to the highest standards of integrity, transparency, accountability, and compliance in all our endeavours.

    The Charter of the Chamber is designed to represent and advocate for the industry as a whole. As such, the Supervisory Board will undergo annual elections where all Industry Members have equal rights in
    electing their representatives.

    As the newly formed Chamber embarks on its journey, it invites all industry stakeholders to join hands in advancing the shared vision of a prosperous and sustainable mining industry in Kazakhstan.

  • Kazatomprom is represented at the country pavilion as part of the IAEA General Conference

    Kazatomprom is represented at the country pavilion as part of the IAEA General Conference

    On September 25th, during the 67th session of the General Conference of the International Atomic Energy Agency (IAEA) held in Vienna, Austria, the official inauguration of the national pavilion of the Republic of Kazakhstan took place. As reported by SKnews.kz, the pavilion showcased the remarkable achievements of Kazakhstan’s nuclear industry.

    Kazatomprom, the national atomic company, provided comprehensive information about its pivotal role in the global uranium market, its unwavering commitment to nuclear non-proliferation, its fruitful collaboration with the IAEA, and the commendable activities of the IAEA Low Enriched Uranium Bank situated at the Ulba Metallurgical Plant.

    Dignitaries from the Kazakhstani delegation and esteemed guests attending the international industry forum graced the event with their presence.

    “In recent years, Kazakhstan has made significant strides in the field of nuclear energy. Our nation has always recognized the potential of nuclear power to foster progress, while diligently upholding the highest standards of safety and environmental preservation. Today, we gather here to showcase the exceptional contributions of esteemed organizations such as the National Atomic Company ‘Kazatomprom,’ the National Nuclear Center of Kazakhstan, and the Institute of Nuclear Physics of the Ministry of Energy of Kazakhstan,” emphasized Almasadam Satkaliyev, the Minister of Energy of Kazakhstan, during his welcoming address.

    The inauguration of the Kazakhstani pavilion also featured a noteworthy speech by Mikhail Chudakov, the Deputy Director General of the IAEA. He underscored Kazakhstan’s pivotal role in the advancement of peaceful nuclear energy and its substantial contribution to mitigating the consequences of climate change, as well as in achieving global objectives for low-carbon development.

    Throughout the conference, the Kazakhstani delegation will actively participate in thematic sessions and engage in meetings with representatives from partner countries to discuss a wide array of matters pertaining to bilateral cooperation.

    It is anticipated that the conference will yield significant decisions concerning the development of the global nuclear industry.

  • Independent expert Telman Shuriev: Increasing the area of geological and geophysical exploration is a strategic task

    Independent expert Telman Shuriev: Increasing the area of geological and geophysical exploration is a strategic task

    Telman Shuriev, the head of the Industrial Asset Management Department at “NAC Kazatomprom” and a Doctor of Business Administration in Industrial Technology, sheds light on the key directions outlined in President Tokayev’s address to Kazakhstan regarding the development of the geological exploration and water sectors, as reported by inbusiness.kz.

    The President’s address to the nation demonstrates a forward-thinking approach towards a new economic model and takes into account the opinions of experts and the public. Notably, the development of geological exploration stands out as a strategically important decision. The President emphasizes the need to modernize the management system of the mining sector promptly. I find it particularly significant that the Head of State has set an ambitious goal of expanding the area of geological and geophysical exploration to a minimum of 2.2 million square meters within the next three years. This emphasis on the development of rare and rare-earth metal deposits is well-founded, considering Kazakhstan’s abundant reserves. It is expected that this sector will attract both domestic and foreign investors, especially as the country moves towards economic decarbonization, actively reducing greenhouse gas emissions and carbon intensity in its industries.

    President Tokayev also highlights the crucial role of water resources in Kazakhstan, placing them on the same level of importance as oil, gas, and metals. The establishment of an independent ministry dedicated to overseeing water issues signifies a significant step forward. This decision aligns with the practices of developed countries, where specialized agencies are created to focus on key areas of national development. Additionally, the re-establishment of the National Hydrogeological Service in Kazakhstan is of great importance. This institution will address water resource challenges and can be structured to operate independently of the state budget. By collaborating with investors and natural resource users, the National Hydrogeological Service can create a competitive environment and become a promising avenue for investment in Kazakhstan’s economy.

    Notably, experts in the field of ecology and hydrogeology in Kazakhstan have also expressed the need for a national company dedicated to managing groundwater. They emphasize the importance of transforming existing state-authorized enterprises into a unified entity that includes specialists from geology, hydrogeology, ecology, and the industrial sector. This approach, coupled with adequate state budget allocation, can pave the way for comprehensive work in this sector. For example, focusing on the underground Kokzhida deposit, located in the Aktobe Region’s Temir District, which has significant reserves capable of providing drinking water to the western region of the country.

    President Tokayev’s address sets a clear vision for the development of the geological exploration and water sectors, emphasizing the importance of these industries for Kazakhstan’s economy. With the implementation of modernized management systems and the reorganization of government agencies, the country is well-positioned to capitalize on its abundant reserves and address critical challenges in these sectors, attracting investment and driving sustainable development.
    The issue of accessibility and quality of water resources in Kazakhstan is a matter of great significance. Currently, Kazakhstan ranks 70th in terms of access to quality water supply, making it one of the most water-deficient countries in the Eurasian continent. Within Asia, it stands at the 8th position in terms of water deficiency, with only 2.8% of its territory covered by water, while arid zones comprise two-thirds of the land. In essence, Kazakhstan is heavily reliant on water. This situation primarily arises from excessive regulation in the upper reaches of rivers, such as the construction of reservoirs and extensive water usage. Furthermore, the costs associated with irrational water consumption in these river basins, such as limited utilization of water-saving technologies, lack of automated water accounting, and underdeveloped agricultural cooperation, exacerbate the problem. Experts express concern that if these trends persist, Kazakhstan will face severe water supply challenges in the future, as natural surface water resources have been steadily declining in recent years. Additionally, climate change projections indicate a 14% to 40% decrease in water flow by 2030. It is evident that there is a lack of comprehensive policy for the development of the water supply sector, with previous programs focused more on restoring existing systems. Despite significant budget allocations and the adoption of state programs, many villages and regions still lack access to drinking water.

    Undoubtedly, the quality of governance significantly impacts the effectiveness of water policy. The deficiencies in ensuring the population’s access to drinking water can largely be attributed to the frequent reorganization of state bodies, resulting in the transfer of responsibilities of the Committee on Water Resources from one department to another. The management of water resources has been marred by wastefulness, as indicated by Kazakhstan’s assessment as the least efficient in terms of water governance according to the Global Water Partnership UN Water Governance and State of the World’s Water index. Another challenge stems from the absence of a single authorized body responsible for coordinating the implementation and management of policies related to providing the population with drinking water. Previously, these functions were divided between two ministries that did not effectively collaborate. Furthermore, local representative bodies (maslikhats) in the regions have played a limited role in monitoring the use of budget funds.

    To improve the situation in the water sector, several measures need to be taken. It is imperative to establish a unified monitoring system that tracks the availability of centralized water supply and the quality of drinking water in both urban and rural areas. This system should be entrusted to a single independent authority to avoid conflicts of interest. The normative and legal framework, as well as terminology, should be regulated. External specialists with expertise in water resource management should be engaged in developing goals, intentions, and efficiency indicators for each level of government. Priority attention must be given to training and capacity building of specialists in water resource management. Attracting investments for the construction of new pipelines and equipment types should be accompanied by strict consumption control.

    In his address, President Tokayev emphasized the responsible and prudent use of resources, including water. I wholeheartedly support this notion. The industrial sector, which accounts for approximately 25-30% of total water intake, deserves greater attention from government bodies. Of this proportion, 92% is sourced from surface water, while 8% comes from groundwater sources. Regrettably, only about 20% of industrial enterprises utilize water recycling technologies. Projections indicate that by 2030, industrial water intake will increase by another 10%, accounting for 35-40% of total water resources, while the overall quantity of water resources in the country is expected to decline. Assessing losses reveals that industrial consumers experience an average water loss of about 40% during transportation.

    To address these concerns, authorized bodies should collaborate with industrial companies to conduct accurate studies on losses and develop solutions for their reduction. Timelines for implementing these measures, along with appropriate funding, should be established. Initiating loss indicators and subsequently setting Key Performance Indicators (KPIs) for their reduction is crucial. Currently, precise indicators in this regard are lacking. To commence this effort, allocating funds within the 1% for Research and Development (R&D) for subsoil users would be a prudent step.

    It is also worth noting that there is a deficiency in adequate and quality water consumption metering equipment, both at the inlet and outlet stages of production. Metering should be implemented at all stages, and it is essential to ensure that metering devices are in working order. Accurate data is indispensable for a comprehensive understanding of water management.

    Kazakhstan has already approved a Low Carbon Development Strategy until 2060, which encompasses clear indicators and potential tools for reducing greenhouse gas emissions, particularly in the industrial sector. Similarly, it is imperative for the country to develop a similar strategy for effective water resource management until 2050. This strategy should encompass indicators for water resources, with a high level of implementation. Such a strategy would provide industrial enterprises with guidance for their environmental policies, fostering a more coherent and systematic approach rather than chaotic“`
    I believe that it is a very timely decision to determine the current status of water for our country. Government bodies insufficiently pay attention to the consumption of the industrial sector, where about 25-30% of the total water intake is accounted for by industry, of which 92% is surface water and 8% is groundwater sources. It should be noted that only about 20% of industrial enterprises use water recycling technologies. Meanwhile, there is a forecast that by 2030, industrial water intake will increase by another 10% and will account for 35-40% of the total volume of water resources, while the quantity of water resources in the country will decrease. The assessment of losses shows us that water losses during transportation average about 40% for industrial consumers.

    In this regard, I would recommend that authorized bodies, in conjunction with industrial companies, conduct studies on accurate losses, develop solutions for their reduction, determine the timelines for the implementation of measures with the allocation of appropriate funds, establish the starting point for loss indicators, and then set KPIs for their reduction. Currently, there are no exact indicators in this direction. To start with, we can determine the funds allocated within the 1% for R&D for subsoil users.

    It is also worth noting that at the moment there is a lack of adequate and quality water consumption metering equipment at the inlet and outlet, not to mention the need for metering at all stages of production; on some enterprises, metering devices do not work at all, as a result, we do not have accurate data and, accordingly, do not see the full picture of water management.

    Kazakhstan has approved a Low Carbon Development Strategy until 2060, which includes clear indicators and possible tools for reducing greenhouse gas emissions, including in the industrial sector. By analogy, our country needs to develop a similar strategy for effective water resource management until 2050, reflecting indicators for water resources, with a high status of implementation. This will provide industrial enterprises with guidance on the general direction of their environmental policy, rather than working in a chaotic manner.

  • Kazakhstan Energy Transition

    Kazakhstan Energy Transition

    Steppes to Net Zero

    This report provides a comprehensive perspective on Kazakhstan’s energy transition pathway, striking a delicate balance between energy costs, supply reliability, and environmental sustainability. It sheds light on the economic risks associated with continued support for coal-fired generation and highlights the need for international funding to assist the country in its just transition. While Kazakhstan’s individual contribution to global emissions may be limited, similar to that of Spain or France, its emissions intensity relative to GDP remains alarmingly high, with the energy sector being the primary source of greenhouse gas emissions, accounting for 82.4% of the country’s total emissions. Fuel combustion alone is responsible for 70.5% of Kazakhstan’s overall greenhouse gas emissions. Additionally, the Central Asian region is highly vulnerable to the impacts of climate change, further emphasizing the urgency of taking action.

    It is important to note that there is currently no political commitment to phase out coal due to concerns over potential disruption to the socio-spatial and economic balance. Political support for coal-fired technologies is driven by the inflexibility of the energy system and the legacy of district heating. However, maintaining support for coal in the long term poses significant economic risks and hinders investment in activities that could diversify Kazakhstan’s economy and facilitate a just transition.

    The upcoming decade or so will be crucial in laying the groundwork for the new economy. Failing to do so will result in economic stranding, as legacy revenue streams and traditional jobs dwindle without the offset from new, clean revenue streams and employment opportunities.

    Kazakhstan’s current low carbon price fails to incentivize energy transformation and proves to be an ineffective policy tool, especially considering the availability of free quotas. To facilitate Kazakhstan’s energy transition, it is imperative to establish a higher carbon price through reduced free quotas and government auctions.

    By 2030, the integration of renewable energy sources will necessitate the implementation of storage at scale to ensure system flexibility. Governmental planning and support for the rollout of storage infrastructure will be vital during this decade.

    Financial aid is essential for Kazakhstan to expedite its transition to clean energy. Blended concessional financing should be made available to facilitate the just transition from coal to clean power, contingent upon the existence of a credible coal phaseout plan.

    Current political and technological commitments run the risk of perpetuating the fossil fuel infrastructure and impeding the growth of renewables. Power prices are expected to rise significantly with the addition of new coal plants or retrofitting of existing ones. However, the inclusion of renewables, which have demonstrated declining price trends in renewable energy auctions, will lower power prices for end users. New coal plants are twice as expensive as new renewables with storage, and breaking even would require a doubling of power tariffs. Under our base scenario, new renewables will outcompete existing coal units within one year, while renewables with storage will be cost competitive within five years. It is crucial to accelerate and expand the deployment of renewables on a larger scale than currently envisioned.