MINEX Forum

Region: Kazakhstan

  • “To Punish the Guilty Is Not Enough”: AMANAT Deputies Put Forward Demands to the Leadership of AMT”

    “To Punish the Guilty Is Not Enough”: AMANAT Deputies Put Forward Demands to the Leadership of AMT”

    According to Nikita Shatalov, society does not believe that the truly responsible parties will be held accountable. Deputies from the AMANAT faction once again raised the issue of the responsibility of the leaders of ArcelorMittal Temirtau (AMT) for accidents at the company’s facilities that have resulted in the deaths of Kazakhstanis during a plenary session of the Majilis, as reported by Azattyq Rýhy.

    “Over a month ago, an accident occurred at the Kazakhstan mine. During the fire, which is still not extinguished, 5 people died, and 16 others were injured. The enterprise will not be operating for a year. We awaited the results of the government commission’s work, and they were announced last week. The investigation found that the full blame lies with the employer. 28 people who should be subject to criminal prosecution have been identified,” said Deputy Nikita Shatalov, addressing a request to Prime Minister Alihan Smailov and Prosecutor General Berik Asylov.

    He emphasized that this is not the first accident at ArcelorMittal Temirtau’s facilities.

    “The AMANAT faction has repeatedly raised issues of equipment operation violations, safety issues, and inadequate labor protection. Unfortunately, society does not believe that the truly responsible parties will be held accountable. Often, in such incidents, the blame was placed on the performers, while major managers made decisions that led to accidents.

    This time, too, it is obvious that the accident, which resulted in the loss of our compatriots, occurred due to the fault of the enterprise’s leaders. They decided that they could save money by purchasing unsuitable equipment and not complying with all technical requirements for coal mining. For example, it became known that a belt that, according to Kazakhstani legislation, should have been fire-resistant, caught fire. This is a blatant disregard for the fate of our people. If it were not for someone’s greed, Steshin, Khalikov, Burgun, Slyunkov, and Starovoit would still be alive,” the deputy said.

    Nikita Shatalov stated that the deputies of the AMANAT faction were at the scene of the tragedy.

    “We talked to colleagues of the deceased miners, saw the deplorable state of the mines, met with the families. People, unfortunately, cannot be brought back, but society expects justice.

    Firstly, we demand that you do not weaken control. The results of the investigation must lead to fair punishment. Those responsible for the accident, for the deaths of miners, must bear full responsibility for what happened. No one, especially the leaders of the enterprise, including foreigners, should be removed from the orbit of criminal prosecution. Those who made criminal decisions should be punished several times more severely than involuntary performers.

    Secondly, punishing the guilty is not enough. The accident at Kazakhstan mine is far from the first in recent years. And the reason for all of them is the same – the investor squeezed everything out of Soviet technologies, did not modernize, and did not monitor working conditions in the mines. This is the reason for all the deaths of miners, and there have been more than 100 during Mittal’s work in Kazakhstan. We demand that those who have earned hundreds of billions on the lives and health of Kazakhstanis fulfill their investment obligations in full. The Government of Kazakhstan has all the necessary legal levers for this,” the deputy said.

  • Gold miner may revive London listing after Russian asset sale

    Gold miner may revive London listing after Russian asset sale

    Polymetal International’s CEO, Vitaly Nesis, has expressed the possibility of reviving the company’s London listing once its sanctioned Russian unit has been sold. Polymetal, a gold miner that derives approximately 70% of its sales from Russia and the remaining from Kazakhstan, recently re-domiciled from Jersey to Astana as a preliminary step towards spinning off its Russian business in compliance with Moscow’s restrictions. This move, however, made it impossible to maintain its London listing. Nevertheless, the Russian unit was put up for sale after being included in a US sanctions list in May. Once the sale is finalized, Polymetal will reconsider listing alternatives.

    Nesis revealed that there has been significant interest in the Russian business from over ten potential buyers, including investors from China who are willing to take on sanctions risks. At present, the two parts of the company operate as separate entities, with independent funding and management decisions. Nesis, as the CEO, receives periodic reports on the activities of the Russian unit. While sales in Russia were temporarily halted due to sanctions, they have now resumed.

    Due to restrictions on developing Russian assets, Polymetal is exploring alternative options. Nesis mentioned that they are evaluating opportunities in Uzbekistan and Kyrgyzstan, considering potential acquisitions in those regions.

    Regarding the company’s future listing, Nesis stated that once the Russian assets are divested, they may consider a London listing over Dubai or Abu Dhabi. This decision reflects their strategic considerations and aligns with their future plans.

  • The company Polymetal has become a resident of Kazakhstan

    The company Polymetal has become a resident of Kazakhstan

    In a historic move, Polymetal, one of the world’s leading gold mining companies, has officially relocated its operations to Kazakhstan. This decision marks a significant milestone for the country’s stock market, as it is the first instance of a company making such a move. Furthermore, Polymetal has also shifted its primary trading platform from the London Stock Exchange to the Kazakhstan Stock Exchange. The reverberations of this decision within the stock market are examined in a report by a correspondent from “Habar 24.”

    Polymetal has successfully transitioned its jurisdiction and now stands as a proud resident of Kazakhstan. Already, approximately 4,000 shareholders from the United Kingdom, the United States, and Europe have transferred their shares to the AIX Exchange, signaling the beginning of a promising new chapter.

    Vitaly Nesis, the CEO of Polymetal International, expressed his satisfaction with the extensive efforts made over the past nine months. During this period, the company engaged in meetings with over 500 institutional and retail investors. Nesis believes that these interactions played a pivotal role in shifting sentiment. Ultimately, when the final vote on sequential listing and delisting from London took place, more than 90 percent of voting shareholders supported these decisions.

    Within the Astana International Financial Centre (AIFC), there is a shared anticipation that the influx of large investors brought about by Polymetal’s relocation will create fresh opportunities for other Kazakhstani companies.

    Renat Bekturov, the Managing Director of the AIFC, emphasized that Polymetal has not only moved its operations but has also established itself as a resident and a Kazakhstani company within the AIFC. With substantial assets in Kazakhstan, including the two largest gold mining companies in the country, Polymetal’s transition to the jurisdiction of the AIFC also involved transferring its primary trading platform from the London Stock Exchange to AIX, situated within the AIFC. Consequently, global custodians have recognized AIX as a platform and regard Kazakhstan as an attractive investment market.

    Over the next two years, Polymetal aims to enhance its liquidity indicators. Although meticulous work lies ahead, the company has already made strides, with the average daily trading volume for the month reaching approximately $150,000 USD

  • C5+1 Critical Minerals Dialogue with Central Asian countries

    C5+1 Critical Minerals Dialogue with Central Asian countries

    U.S. President Joe Biden met with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan at the United Nations General Assembly on 19 September 2023.

    Perhaps the most surprising point of discussion was the proposed launch of a C5+1 Critical Minerals Dialogue. Critical minerals like chromium, copper, and lithium are needed for manufacturing clean energy technology.

    Central Asian countries – especially Kazakhstan and Uzbekistan – have great potential to leverage their mineral resource bases for geopolitical gain, especially as the United States is eager to shed its dependence on China for minerals. China currently dominates the global critical minerals market, and it is the largest source of imports to the U.S. for 26 critical minerals. A C5+1 dialogue focused just on mineral wealth stands to be mutually beneficial for all participants.

    “We are committed to deepening cooperation to develop the capacity to meet growing global clean energy demands, including by potentially providing the world with safe, secure, and sustainable nuclear fuel supplies.  Our attention to energy security in the region includes building diverse, resilient, and secure critical minerals supply chains; developing new technologies for the extraction and processing of raw materials; and adding value through regional industrial cooperation to reduce strategic dependencies and meet our respective economic, energy security, and climate goals.  Demand for critical minerals, which are essential for clean energy and other technologies, will expand significantly in the coming decades.  To further develop Central Asia’s vast mineral wealth and advance critical minerals security, we will launch a C5+1 Critical Minerals Dialogue.  It will provide a forum in which the C5+1 can share information about critical minerals challenges and opportunities, promote connections between government officials and private sector industry, catalyze investment, and collaborate on critical minerals supply chains.”

    However, it’s not a done deal yet. Biden noted only that “we are also discussing the potential for a new critical minerals dialogue.” Given the importance China also attaches to the critical minerals sector, close cooperation with the United States may be politically difficult for Central Asian states.

  • Baksy conducts estimations of reserves in the gold-copper area

    Baksy conducts estimations of reserves in the gold-copper area

    The company Polymetal, in partnership with “Kazgeology,” is currently in the process of calculating the reserves in the gold-copper area of Baksy in the North Kazakhstan Region. The CEO of Polymetal International plc, Vitaly Nesis, provided this information during a press approach at the “Transfer of the Initial Listing to the AIX Exchange and Redomiciliation to the AIFC” ceremony with inbusiness.kz.

    Nesis expressed satisfaction with the partnership with “Kazgeology” and mentioned that discussions regarding future steps will be more meaningful after the reserves are placed on the state balance sheet. Polymetal recently increased its stake in Baksy to 75% and is considering a decision on production at the site for the upcoming year. It’s worth noting that “Kazgeology” is now under the control of the national mining company “Tau-Ken Samruk.”

    During discussions with reporters, Nesis also mentioned the planned sale of Polymetal’s Russian division within the next 6-9 months. The company is exploring opportunities not only in Kazakhstan but also in Central Asian countries.

    The CEO addressed the topic of a potential increase in the tax burden on businesses in Kazakhstan, emphasizing that the recent increase in the mineral extraction tax (MET) was justified given the favorable external conditions. He expressed hope that the final decisions on tax code amendments would consider the capital-intensive nature of the mining industry and maintain its investment attractiveness.

    Furthermore, Polymetal aims to increase the liquidity of its shares on the AIX exchange in Astana over the next two years. The company recently transferred its primary listing from the London Stock Exchange to the AIX exchange, and Nesis emphasized that the domicile in the AIFC is permanent. There are no plans for an additional listing in Abu Dhabi or any other platform at this time.

    The relocation of Polymetal to the AIX exchange is expected to enhance liquidity on the platform and attract global investors. Renat Bekturov, the head of the AIFC, highlighted the positive impact on the Kazakh stock market and the increased participation of renowned investment companies.

    Regarding the proposed merger of the AIFC trading platform with the Kazakhstan Stock Exchange (KASE), Nesis mentioned ongoing discussions on how to combine liquidity between the two entities, considering their respective minority shareholders.

    In conclusion, Polymetal’s collaboration with “Kazgeology” in calculating reserves, its strategic plans for the future, and its involvement in the AIX exchange demonstrate the company’s commitment to growth and development in the mining sector.

    Regarding the potential merger between the AIFC trading platform and the Kazakhstan Stock Exchange (KASE), Nesis commented on the consideration of KASE’s Russian shareholders.

    “Both KASE and Polymetal have minority shareholders. MOEX, the Moscow Exchange, along with local banks and brokers, are shareholders of KASE. On the other hand, the AIFC exchange has notable shareholders such as the Shanghai Stock Exchange, NASDAQ, and the Silk Road Fund. Currently, no decision has been made, and our discussions primarily revolve around how to combine our liquidity, in what form it will take, whether there will be changes in the legal structure, and if so, what those changes will entail. The next step involves negotiations with the existing shareholders to determine their future involvement, whether they will continue as shareholders, or if a new structure will be established. These matters remain open and under discussion,” Bekturov elaborated.

    Furthermore, Bekturov addressed the question of measures planned to enhance the liquidity of Russian issuers like “Rusagro” or Ozon on the AIX.

    “These issuers are relatively new, and their global depositary receipts (GDRs) are listed and traded on our exchange. The challenge lies with the global depository, Euroclear, as they are currently working on segregating the accounts of shareholders due to the situation at hand. Once Euroclear resolves this matter and market-making brokers willing to provide liquidity are identified, the issue will be resolved. We are actively working with the issuers to address this matter,” Bekturov affirmed.

  • Kazakhstan’s Plans for Uranium Sector Development

    Kazakhstan’s Plans for Uranium Sector Development

    The main players in this field are Russia, Germany, the Netherlands, the United Kingdom, the United States, France, and China. The establishment of enrichment facilities is under the control of the IAEA and the global community.

    “The Ministry of Energy, together with Kazatomprom and other interested organizations, is working on the development of the nuclear fuel cycle in the atomic industry,” explained the ministry.

    In turn, Kazatomprom reported that through the Russian-Kazakh Uranium Enrichment Center, they have access to enrichment services of up to 2.5 million SWU* per year until 2043 based on long-term contracts.

    “This option is used to ensure the production of Ulba-TVS fuel with a designed capacity of 200 tons of uranium per year in the form of fuel assemblies. The plant was launched in 2021 and, according to Kazatomprom, fully satisfies the enriched element requirements for the implementation of this fuel project for the entire duration.”

    The national company also holds a 10% stake in the International Uranium Enrichment Center, a joint venture with Russia, Ukraine, and Armenia. The center was established to strengthen the non-proliferation regime of nuclear weapons. Shareholders of the center have access to enrichment services based on their guaranteed SWU quota proportionate to their share in the center for the production of fuel for their own nuclear energy needs. The national company noted that this covers the demand for low-enriched uranium.

    It is worth mentioning that President Kassym-Jomart Tokayev previously instructed to focus on several areas, including uranium enrichment.

    *SWU: Separative Work Unit

  • Korean companies are interested in projects related to engineering, mining, and nuclear energy

    Korean companies are interested in projects related to engineering, mining, and nuclear energy

    The President of Kazakhstan recently engaged in negotiations with the President of the Republic of Korea, Moon Jae-in, as reported by the Akorda press service. The discussions centered around the future prospects of the strategic partnership between Kazakhstan and South Korea.

    Kassym-Jomart Tokayev, the President of Kazakhstan, emphasized the friendly relations shared between the two nations and highlighted the significance of the dynamic development of their economic ties. The President noted that bilateral trade turnover has consistently shown growth, surpassing 6 billion dollars last year. Furthermore, Korean companies have made substantial investments in Kazakhstan’s economy, totaling over 8 billion dollars, positioning them as one of the top 10 major investors in the country.

    The President also drew attention to the presence of more than 700 Korean companies and joint ventures currently operating in Kazakhstan, including prominent names such as KIA, Hyundai, Samsung, LG, and others. During the negotiations, Kassym-Jomart Tokayev outlined promising areas of economic cooperation, particularly in the extraction of rare earth metals and the development of nuclear energy.

    President Moon Jae-in of Korea expressed his country’s keen interest in further enhancing mutually beneficial cooperation with Kazakhstan. He emphasized that Korean companies exhibit a special interest in expanding existing projects and undertaking new ventures in machinery manufacturing, mining, and nuclear energy sectors.

  • How much gold is left at the largest Vasilkovsky deposit in Kazakhstan

    How much gold is left at the largest Vasilkovsky deposit in Kazakhstan

    According to information presented by the “Mining Industry. Central Asia” magazine through inbusiness.kz, the Vasilkovsky deposit in Kazakhstan is a significant source of gold. After the completion of open-pit mining operations in 2026, the company, specifically the “Kazzinc” division of Altyntau Kokshetau, plans to process off-balance ores from its stockpiles. This new project for gold extraction from the Vasilkovsky deposit has been posted for discussion on Kazakhstan’s Unified Environmental Portal.

    The company’s mining operations are expected to reach a depth of 540 meters by 2026, with a horizon of -305 meters. It is worth noting that a considerable portion of the Vasilkovsky deposit’s reserves has already been mined. In 2022, experts conducted a reevaluation of the resources and included them in the state balance. The documented reserves indicate that the subsoil contains 37.38 million tons of gold-bearing ores with 73.77 tons of gold at an average content of 1.97 g/ton. Additionally, there are 6.58 million tons of ore and 12.08 tons of gold categorized as presumed.

    The enterprise has a designed capacity of processing 8 million tons of ore annually. The existing gold processing plant, which has been operational since 2009, will handle the raw material. The processing method will remain the same, utilizing a gravity-flotation beneficiation scheme followed by sorption cyanidation of the finely ground flotation concentrate.

    Furthermore, the report highlights that the Vasilkovsky and Bakyrchik deposits are the largest gold assets in Kazakhstan. The Vasilkovsky deposit alone boasts approximately 370 tons of proven reserves, with a gold content of 2.8 g per ton. On the other hand, the Bakyrchik deposit holds around 326 tons of precious metal, with a higher gold content in the ore, at 7.7 g per ton.

    Gold-bearing ore from the Vasilkovsky deposit undergoes multi-stage processing at the company’s ore-processing plant to produce doré. The resulting doré alloys are then sent to the Ust-Kamenogorsk Metallurgical Complex’s refining plant. Additionally, the company is involved in gold refining into bars.

    Altyntau Kokshetau contributes significantly to Kazakhstan’s gold production, bringing in up to 400,000 troy ounces of gold to the country each year.

    Overall, Kazakhstan is home to approximately 300 gold deposits, spread across all regions of the republic, with a concentration in the East Kazakhstan and Akmola regions. As of June 2022, Kazakhstan’s gold reserves stood at 373.4 tons, ranking the country 14th among the world’s largest “gold” countries. Notably, in the first quarter of 2022, Kazakhstan held the highest gold reserves among Central Asian countries.

    In 2021, the country produced approximately 33 million tons of ore and 66 tons of refined gold, as reported by Marat Karabaev, Deputy Minister of Industry and Infrastructure Development, at the Third Forum of Gold Miners of the Republic of Kazakhstan.

    Kazakhstan’s gold mining enterprises also export a portion of the extracted metal to other countries, with primary destinations being Kyrgyzstan, Russia, Uzbekistan, and Italy. According to the National Statistics Bureau of Kazakhstan, gold exports in bars and other unprocessed forms witnessed an 18% increase in the first nine months of 2020 compared to the same period in 2019. Notably, Kyrgyzstan received the largest amount of precious metal, totaling $4.6 million, followed by Russia with $235.6 thousand, Uzbekistan with $34 thousand, and Italy with $12.5 thousand.

  • Kazatomprom Plans to Increase Uranium Exports via Middle Corridor

    Kazatomprom Plans to Increase Uranium Exports via Middle Corridor

    Kazatomprom, a prominent player in the uranium industry, has revealed its plans to increase uranium exports by utilizing the Middle Corridor. In a recent interview published on the Bloor Street Capital YouTube channel on September 15th, Kosherbayev, a representative of Kazatomprom, discussed the company’s operational performance, forecasted expectations, and the logistics routes involved.

    Kosherbayev mentioned that a significant volume of uranium is currently being transported through the Trans-Caspian International Transport Route (TITR). While there may be certain implications related to infrastructural limitations, he assured that all expected deliveries through this route will be fulfilled in accordance with the agreed terms.

    During a symposium, Kazatomprom representatives provided an update on the progress of TITR shipments. The company reported that from January to June, 58% of all uranium shipments from Kazakhstan to Western countries were conducted via TITR. It is projected that by the end of the year, the proportion of TITR shipments in Kazatomprom’s overall uranium deliveries to Western countries will rise to 71%.

  • Kazgeology Becomes Subsidiary of Tau-Ken Samruk, 100% Voting Shares Transferred

    Kazgeology Becomes Subsidiary of Tau-Ken Samruk, 100% Voting Shares Transferred

    As per the Government Resolution No. 1128 dated December 30, 2022, the state-owned stake in Kazgeology has been transferred as a form of payment in exchange for newly issued shares of the esteemed Samruk-Kazyna Fund. Kazgeology, in its role, primarily focuses on the exploration and assessment of mineral resources, the identification of promising areas, and the facilitation of foreign and domestic investments to bolster the nation’s mineral resource base.

    As the sole shareholder of Kazgeology, Tau-Ken Samruk assumes both the rights and obligations. It is worth highlighting that the conditions for partners and investors in all ongoing projects will remain unaltered. However, we are presented with a remarkable opportunity to broaden the horizons of cooperation. With a shared interest, Tau-Ken Samruk can actively participate in investment projects throughout the construction and operational phases,” expressed Bakytzhan Chirchikbaev, the esteemed Chairman of the Management Board of Tau-Ken Samruk.

    At present, Kazgeology is diligently engaged in the implementation of numerous investment projects in collaboration with esteemed partners. Joint ventures and consortia have been established, fostering fruitful associations with esteemed global leaders in the mining industry such as Rio Tinto, KazZinc, Yildirim Holding A.S., Polymetal, Kazakhmys, and Ulmus Fund.