MINEX Forum

Tag: Kazakhstan

  • C29 Metals Secures Southern Tenement at Ulytau Uranium Project in Kazakhstan

    C29 Metals Secures Southern Tenement at Ulytau Uranium Project in Kazakhstan

    C29 Metals has successfully acquired the southern tenement, spanning 213km², at the Ulytau Uranium Project in southern Kazakhstan. This new tenement is contiguous with the existing license area, located directly to the south and east of the project’s current boundaries. With a market capitalization of $11.17 million, C29 Metals announced that the tenement granting process was completed within an impressive 15 days, highlighting the efficiency of government agencies and their support for the company’s endeavors.

     

    Managing Director Shannon Green expressed excitement over the swift approval, stating, “It is very exciting to have this highly prospective application granted in such a rapid timeframe.” He further emphasized that this rapid approval demonstrates the positive operating environment in Kazakhstan and the strong support the company is receiving.

    C29 Metals will immediately begin the exploration approval process for the new southern tenement. The approval process for the company’s planned exploration programs at the Ulytau Project is already well advanced and proceeding as scheduled. The Ulytau Project is located in the Almaty region, approximately 15km southwest of the Bota-Burum mine, one of the largest uranium deposits mined during the former Soviet Union era.

  • Kazakhstan Issues 333 Licenses for Solid Minerals in 2024

    Kazakhstan Issues 333 Licenses for Solid Minerals in 2024

    From January to July 2024, Kazakhstan’s subsoil users received 333 licenses for solid minerals, reports the Ministry of Industry and Infrastructure Development of Kazakhstan. Most of these are exploration licenses, with only 13 issued for extraction. The total number of applications exceeded 800.

    According to the Ministry, auctions held in May alone added 89 million tenge to the budget. An auction was also held for the troubled Obukhovskoye deposit, where authorities expect the new owner to continue operating the processing plant and maintain jobs. The enterprise produces rutile-zirconium concentrate.

    On August 12, another 23 deposits of solid minerals will be put up for auction.

    The Ministry also monitors the fulfillment of obligations: since the beginning of the year, 32 licenses and 22 contractshave been terminated due to non-compliance with conditions.

    The Ministry emphasizes that a key task remains leveraging the country’s raw material potential to attract investments. To this end, amendments to the legislation are being made with the participation of the industry community.

  • C29 Metals Seeks New Exploration Licenses in Kazakhstan

    C29 Metals Seeks New Exploration Licenses in Kazakhstan

    In a recent development, the geological exploration company C29 Metals Limited has submitted applications for new exploration licenses in Kazakhstan. The areas of interest are situated to the south and north of the company’s current exploration site, according to inbusiness.kz. C29 Metals is looking to secure rights to study two sections of land: one covering 213 km² near the Ulutau Uranium Project and another 39 km² site close to the Botaburum mine. The company considers these zones promising based on historical drilling data and satellite imagery. It is estimated that the subsurface may contain 3,800 tonnes of uranium oxide. Currently, the Australian company holds full ownership of the Ulutau project. However, it remains unclear how they plan to proceed with extraction, as current legislation stipulates that mining of this metal must involve organizations with a majority stake held by Kazatomprom.

  • Kazakhstan’s Ambitious Industrial Expansion: 180 New Projects Set for 2024

    Kazakhstan’s Ambitious Industrial Expansion: 180 New Projects Set for 2024

    Kazakhstan is set to launch 180 new projects by the end of 2024, with an estimated investment of 1.4 trillion tenge (US$2.9 billion), creating approximately 17,400 new jobs, according to the Prime Minister’s press service on July 24. These projects are expected to produce goods valued at nearly 1.8 trillion tenge (US$3.7 billion), including 400 billion tenge (US$843 million) for export and 1.4 trillion tenge (US$2.9 billion) for import substitution.

    Key projects include the EkibastuzFerroAlloys plant in the Pavlodar Region, which will create 800 jobs with a 92.4 billion tenge (US$194 million) investment, producing 240,000 tons of ferrosilicon annually. In the Kostanay Region, a factory will produce cast iron components for trucks, providing 360 jobs with a 78.2 billion tenge (US$164 million)investment and an annual capacity of 45,000 tons.

    The Zhetysu Wolfram company will develop the Boguty tungsten ore deposit in the Almaty Region, investing 135 billion tenge (US$284 million) to create 350 jobs and achieve an annual production of 3.3 million tons of ore and 10,000 tons of concentrate.

    In the Almaty Region, a factory will produce thermal insulation materials, offering 220 jobs with a 43.9 billion tenge (US$92.6 million) investment, producing 1.4 million cubic meters of rock wool and 400,000 cubic meters of polymer insulation annually. Another facility will manufacture springs for rolling stock, creating 51 jobs with a 1.1 billion tenge (US$2.3 million) investment and an annual capacity of 298,500 springs.

    Kazakhstan’s metallurgical production grew by 54.2% in the first five months of 2024, driven by increased output of ferroalloys, raw aluminum, raw lead, and refined copper. The country remains a major exporter of ferrous and non-ferrous metals, with exports rising by 8.3% to $4.7 billion in the first four months of 2024. The government has introduced new regulations for scrap metal collection and processing, including a ban on exporting ferrous scrap and non-ferrous metal waste.

    The chemical industry saw investments reach 68.4 billion tenge (US$144 million) from January to May 2024, with new projects in technical silicon, hydrogen peroxide, and liquid nitrogen production. Nine new small enterprises opened, focusing on regions like Pavlodar and Zhambyl.

    In the coal industry, a new government decree has granted exclusive licenses to coal mining and processing enterprises, aiming to meet domestic coal needs, particularly for the heating season.

    Kazakhstan’s non-ferrous metallurgy sector has strengthened international cooperation, with agreements signed with China and South Korea. The machinery industry saw significant investment and modernization, with industrial production reaching 814.4 billion tenge (US$1.7 billion) in the first half of 2024.

    The building materials and furniture industries also experienced growth, with regulations supporting local producers. The light industry saw a significant rise in production and exports, with investments in clothing and leather production increasing notably.

  • “Samruk-Kazyna” Reports Record Revenue Amid Shifts in Investment Strategy

    “Samruk-Kazyna” Reports Record Revenue Amid Shifts in Investment Strategy

    The National Welfare Fund “Samruk-Kazyna” achieved a record revenue of 15.4 trillion tenge in 2023, despite moving further from its ideal model as an investment holding. This shift is driven by the government’s efforts to maximize returns from the Fund as both a policy tool and a profitable asset. According to the latest audited financial report, Samruk-Kazyna continued to grow its assets, reaching 36.9 trillion tenge, a 10% increase year-on-year. This growth was fueled by significant investments in fixed assets, with a capital expenditure level of 17% of revenue, up from 9% the previous year. The Fund’s long-term assets expanded by 6% to 26.6 trillion tenge, while current assets increased by 18%, bolstered by a 17% rise in inventories and a 19% increase in receivables.

    The asset structure saw a notable rebalancing of cash and deposits: cash holdings decreased by 7% to 2.7 trillion tenge, and bank deposits fell by 23%, with tenge deposits down by 27% and dollar deposits up by 18%. The overall asset growth of Samruk-Kazyna was driven by an increase in equity by 10%, a rise in retained earnings and non-controlling interests, and a 10% growth in liabilities. The liabilities included a reduction in fixed-rate loans by 9% and an increase in floating-rate loans by 19%, mainly short-term. The Fund’s short-term liabilities are now covered by cash at a rate of 61%, down from 71% the previous year. The currency composition of loans has remained consistent since 2022, with 58% in US dollars, 34% in tenge, and 4% each in Swiss francs and euros.

    In 2023, the Fund’s revenue increased by 4%, driven by a modest rise in crude oil sales, which account for 30% of revenue, alongside declines in refined petroleum products and refined gold sales. These decreases were offset by significant growth in other sectors, including rail freight transport (up 30%), uranium sales (up 44%), and gas processing products (up 10%). The revenue growth was accompanied by a comparable increase in production costs, mainly due to a 23% rise in labor costs and a 15% increase in depreciation and amortization expenses. The Fund reported total write-downs of 262 billion tenge, five times higher than in 2022. Net profit decreased by 10% to 2.1 trillion tenge, largely due to a significant reduction in earnings from joint ventures and associates.

    The relationship between Samruk-Kazyna and its sole shareholder, the government of Kazakhstan, remains complex. In 2023, total net cash distributions to the shareholder amounted to 1.3 trillion tenge, up from 306 billion in 2022. This included dividends of 1.27 trillion tenge, as well as other distributions for projects such as the construction of healthcare facilities and a sports complex. Meanwhile, the government recapitalized the Fund with 49 billion tenge, earmarked for infrastructure development in the National Industrial Petrochemical Park in Atyrau.

  • Kazakhstan and Bulgaria Strengthen Educational Ties in Mining and Geology

    Kazakhstan and Bulgaria Strengthen Educational Ties in Mining and Geology

    Viktor Temirbayev, the Ambassador of Kazakhstan to Bulgaria, recently met with Ivaylo Koprev, the Rector of the University of Mining and Geology “St. Ivan Rilski,” to discuss expanding collaborations between higher education institutions in the two countries, particularly in the mining and geological fields. The discussions centered on the exchange of experience, best practices, and the implementation of joint projects in academic mobility.

    Ambassador Temirbayev highlighted the Kazakh government’s efforts to develop the scientific system and incorporate advanced technologies in natural resource extraction, emphasizing the importance of geological science given Kazakhstan’s rich mineral resources. He also noted the celebration of the 125th anniversary of academician Kanysh Satpayev, a key figure in Kazakhstan’s industrial development.

    Ivaylo Koprev shared the University of Mining and Geology’s best practices and teaching methods, expressing a desire to deepen cooperation with Kazakh universities to exchange advanced solutions and facilitate student exchanges under academic mobility programs. The University “St. Ivan Rilski” is recognized as Bulgaria’s sole state educational and scientific institution specializing in the mineral resources industry.

    Both parties agreed to maintain ongoing communication to explore the potential collaboration areas discussed during the meeting. Notably, since the Cooperation Agreement between the Rudny Industrial Institute and the University of Mining and Geology in 2020, two academic mobility programs have been successfully implemented, with a third group of Kazakh students expected in September 2024.

  • Changes in Uranium Mining Tax Rates Announced for 2025

    Changes in Uranium Mining Tax Rates Announced for 2025

    In 2025, the Republic of Kazakhstan will see a change in the mineral extraction tax (MET) rate on radioactive metals, according to the press center of the atomic company Kazatomprom. Starting from the first day of the new year, the tax on the extraction of valuable minerals will be set at 9%. From 2026, a differentiated tax will be introduced, allowing the MET rate to vary between 4% and 18%.

    The rate will depend on the actual amount of uranium extracted under each specific contract, as well as the cost of natural uranium concentrate. If the annual extracted volume is up to 500 tons, the enterprise will be taxed at 4%. For annual production levels up to 1,000 tons, the rate will rise to 6%, up to 2,000 tons — 9%, up to 3,000 tons — 12%, and up to 4,000 tons — 15%. If more than 4,000 tons of uranium is mined in a year, the MET will reach 18%.

    It is important to note that if a certain weighted average price of uranium is exceeded, the tax rate will increase. For example, if the average cost exceeds $70 per pound of concentrate, the tax rate will increase by 0.5%. If the price surpasses $110 per pound, an additional 2.5% will be added to the existing rate.

    Until the end of 2024, uranium companies will continue with the current taxation procedure. Since January 1 of last year, the MET has been 6%. The management of Kazatomprom expects that in 2026, all subsidiaries and joint ventures of the national company will be able to benefit from the differentiated tax calculation approach.

  • Glencore Retains 70.2% Stake in Kazakh Mining Business Amid Price Disagreement

    Glencore Retains 70.2% Stake in Kazakh Mining Business Amid Price Disagreement

    Glencore, the global trading company, has decided to retain its 70.2% stake in the Kazakh mining business after failing to agree on a sale price, according to “Kursiv” citing Bloomberg. Glencore has been simplifying its operations by divesting smaller or non-core assets. The decision to sell its Kazakh assets was made in early summer when Chinese buyers showed interest. This included the Vasilkovsky gold mine, managed by KazZinc.

    Potential investors were unable to meet Glencore’s price expectations, which Bloomberg estimates to be several billion dollars. As a result, the company opted not to proceed with the sale. Under existing rules, investors can acquire a part of the enterprise only if the other partner declines the purchase. The co-owner of KazZinc, Tau-Ken Samruk (holding a 29.8% stake), has not commented on the potential deal.

    KazZinc is a major producer of non-ferrous metals. According to Glencore, last year the enterprise produced 173,900 tons of zinc, an increase of 27,500 tons from the previous year. Additionally, in 2023, KazZinc produced 35,600 tons of lead, 14,800 tons of copper, and 598,000 ounces of gold.

  • Karazhira Reports Significant Profit Decline in 2023 Despite Increased Revenues

    Karazhira Reports Significant Profit Decline in 2023 Despite Increased Revenues

    The coal mining company Karazhira, co-owned by Eduard Ogay (ranked 13th by Kazakhstan’s Forbes with a capital of $800 million) and Vladimir Dzhumanbayev (ranked 25th with $365 million), reported a net profit of 3.1 billion tenge in 2023, down from 9.3 billion tenge in 2022. According to the audited financial statements, Karazhira’s total assetsincreased to 67.8 billion tenge by the end of 2023, up from 64.1 billion tenge the previous year, and its capital rose to 18 billion tenge from 14.6 billion tenge in 2022. The balance sheet value of a single share climbed to 16,243 tenge from 13,888 tenge at the end of 2022.

    Revenue from product sales amounted to 58.4 billion tenge in 2023, compared to 57 billion tenge in 2022. However, the cost of sales increased to 42.3 billion tenge from 35.1 billion tenge in 2022, resulting in a net profit decrease to 3.1 billion tenge for 2023, down from 9.3 billion tenge in 2022. Karazhira earned 58.4 billion tenge from coal sales in 2023 (compared to 57 billion tenge in 2022 and 48.3 billion tenge in 2021), with the majority sold within Kazakhstan (45.1 billion tenge). The company also supplied coal to Russia, Kyrgyzstan, Switzerland, Moldova, and Uzbekistan.

    The auditor noted the company’s dependence on a few key buyers, which accounted for 66% of group revenue in 2023, up from 64% in 2022, highlighting potential risks if these buyers are lost. The credit risk for loans issued to Kyrgyzstan was evaluated at 100%, leading to a reserve being established. Additionally, expenses for the write-off of burnt coal increased to 790.1 million tenge in 2023 from 528.4 million tenge in 2022.

    Key executive compensation dropped to 73.4 million tenge in 2023 from 119.1 million tenge in 2022, and the company reduced its workforce to 845 from 918 in 2022. Karazhira’s assets, including buildings and equipment valued at 5.5 billion tenge, are used as collateral for group loans. The company also extended the repayment of a $20 million loan until December 2024. The main shareholders as of April 1 are Vladislav Ogay, Elina Ogay, Eduard Ogay, Vladimir Dzhumanbayev, and Yerlan Nigmatulin. Karazhira paid 9.9 billion tenge in dividends in 2022 but none in 2023.

    In October 2021, Karazhira issued 20 million bonds at 1,000 tenge each with an annual interest rate of 14%, paying out 2.8 billion tenge in interest in both 2023 and 2022. As of the end of 2023, the company held loans from Altyn Bank and Bank CenterCredit, with various interest rates and maturities in 2024, totaling several billion tenge.

  • Glencore Abandons Sale of Kazzinc Stake After Unmet Valuation

    Glencore Abandons Sale of Kazzinc Stake After Unmet Valuation

    Glencore Plc has abandoned plans to sell its stake in the Kazakh mining company Kazzinc after potential buyers failed to meet its valuation, sources familiar with the situation reported. Glencore, holding a 70% stake in Kazzinc, had been contemplating an exit from the business amid interest from Chinese buyers. The company has now issued a termination letter to the bidders, the sources said, requesting anonymity due to the private nature of the discussions. A Glencore spokesperson declined to comment on the matter.

    Kazzinc, established in 1997 through the merger of eastern Kazakhstan’s three main non-ferrous metals companies, comprises a sprawling network of mines, concentrators, and metal finishing plants. This setup allows the company to transition from digging ore to producing finished zinc metal and products.

    Glencore’s Chief Executive Officer, Gary Nagle, has continued the strategy of his predecessor, focusing on simplifying the business by selling off smaller or more challenging assets. The company has previously sold zinc assets in Peru and some of its smaller copper operations.

    While zinc prices have surged this year due to supply constraints, the long-term outlook remains uncertain. The metal’s future is clouded by its heavy reliance on the struggling construction sector and its limited applications in rapidly growing industries like renewable energy and electric vehicles.