Kanat Sharlapaev, Kazakhstan’s Minister of Industry and Construction, has addressed concerns regarding the acquisition of Qarmet (formerly known as “ArcelorMittal Temirtau,” AMT), stating that government funds were not utilized for purchasing Qarmet shares. Sharlapaev emphasized that the acquisition was financed entirely through private investments, dismissing speculations of state involvement. He underscored the commercial nature of the transaction, highlighting Qarmet’s significance as a major employer with an annual revenue exceeding $2 billion. The minister defended the financing approach, citing it as a standard business practice aimed at enhancing operations and environmental conditions in Temirtau.
Tag: Kazakhstan
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Coal Production Decline in Kazakhstan’s Deposits in February 2024
According to data from the second month of 2024, coal production in Kazakhstan’s deposits decreased to 9.083 million tons, marking a 9.6% decline compared to February of the previous year. While various types of coal are mined in the country, coal accounts for the majority. The beginning of the year has seen a decrease in coal production of this type by 11.3%.
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Kazakhstan’s Iron Ore Production Surges in February 2024
Kazakhstan’s iron ore extraction witnessed a significant surge in the second month of this year, with over 4.187 million tons extracted, marking a 37.5% increase compared to February 2023, according to data provided by the National Statistics Bureau. Production of iron ore agglomerate also experienced a notable uptick, growing by 44.8% for the month. However, in comparison to January 2024, it declined from 475.5 to 456.1 thousand tons. Positive dynamics were also observed in the production of iron ore concentrates, reaching 5.699 million tons in February, marking a 15.9% and 12.3% increase compared to the same month last year and the preceding month of this year, respectively. Additionally, Kazakh mining plants saw a significant rise in the production of non-agglomerated iron ore, with 2.661 million tons processed in February, a 44.9% surge compared to the previous year. The production of iron ore pellets also intensified, reaching 474.8 thousand tons, a 38.8% increase compared to 2023, albeit failing to surpass January’s figures, showing a 2.2% decline. Anticipation is high for a noticeable increase in iron ore extraction following the commencement of operations at the Lomonosovskoye deposit in the Kostanay region, slated for 2025.
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Kazatomprom Forecasts Uranium Supply Deficit Amid Growing Global Demand
During the “ATOMEXPO-2024” forum, Meirzhan Yusupov, Chairman of the Management Board and Member of the Board of Directors of the National Atomic Company “Kazatomprom” stated that with the increasing demand for nuclear energy worldwide, new players are expected to enter the uranium supply market, as Kazakhstan alone may not be sufficient to meet global needs. While currently, global uranium reserves are estimated at 4.7 million tons, capable of meeting the growing demands for nuclear generation in the coming decades, Yusupov noted a potential future deficit due to escalating generation needs. Despite significant geological exploration efforts, he emphasized the likelihood of a structural deficit post-2030, indicating the insufficiency of Kazatomprom alone to bridge this gap. Yusupov anticipated the emergence of new players in uranium mining, with some junior companies already actively engaged in this sector. He reassured that Kazatomprom, as a global leader, remains committed to fulfilling its contractual obligations in uranium supply.
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East Star Resources PLC Secures Second Copper Porphyry Exploration License in Kazakhstan
East Star Resources PLC, a company focused on copper exploration and resource development in Kazakhstan, has unveiled the acquisition of its second copper porphyry exploration license as part of its new copper porphyry exploration strategy. This initiative, initially funded through a US$500,000 grant from the BHP Xplor program, marks a significant advancement in the company’s expansion efforts.
The newly acquired 121 square kilometer tenement displays historical soil anomalies, indicating promising potential for hosting a copper porphyry deposit. Situated approximately 150 kilometers north of the sizable Kounrad open pit copper mine and smelter, with reserves estimated at around 800 million tons at 0.62% Cu and up to 0.76 g/t Au, the area encompasses a 6-kilometer-long and 3-kilometer-wide silica lithocap.
Under the partnership with BHP Xplor, East Star is engaged in regional target generation for copper porphyry deposits, primarily focusing on the Balkash-Ili magmatic arc, which hosts significant deposits like Kounrad and Aktogai-Aidarly. By leveraging modern mineral systems concepts and advanced analytical techniques, East Star aims to secure additional exploration licenses within the targeted area for future fieldwork.
The BHP Xplor grant covers all license fees and initial work programs, including field activities, desktop evaluations, and administrative costs. The program will be overseen by East Star with input from BHP and a team of experts.
Chris van Wijk, Technical Director at East Star, expressed enthusiasm about the progress, stating, “We are thrilled to have secured our second copper porphyry license under the BHP Xplor program. This underscores our ability to swiftly formulate compliant applications and highlights the efficiency of the Kazakh ministerial process in granting new licenses.”
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Kazakhstan Addresses Concerns Over Geological Exploration Funding
In a recent off-site meeting in Kazakhstan, deputies, geologists, and representatives of authorized bodies convened to discuss issues pertaining to geological exploration and potential solutions. It’s worth noting that last autumn, Kazakhstan’s President Kassym-Jomart Tokayev instructed to increase the number of prospective territories for geological exploration to 2.2 million square kilometers by 2026.
During the discussion, industry experts expressed concerns over insufficient funding for exploration activities, as reported by the AGMP press service. Recent records indicate a decline in investments in geological exploration in Kazakhstan. For instance, the value of minerals exported from the country in 2023 exceeded annual investments in exploration by six times.
It is known that Kazakhstan’s investment in geological surveys amounts to only $8 per square kilometer, whereas Russia spends $28 on similar research areas, and Uzbekistan and the United Kingdom allocate $97 and $267 respectively.
In light of this, Erlan Akbarov, the head of the RK Geological Committee, acknowledged that in the absence of funds to bolster efforts in exploring valuable subsoil resources, it might be necessary to reallocate finances earmarked for other purposes. According to Mr. Akbarov, a portion of the budget allocated for scientific research and experimental design work could be invested in geological exploration.
As of today, subsoil users spend around 73 billion tenge on research and development.
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Kazakhstan to Utilize Aerogeophysical Mapping Technology for Metal Deposits Exploration
In a bid to enhance metal deposits exploration, Kazakhstan is set to employ aerogeophysical mapping technology. The regions slated for study include the East Kazakhstan Region (VKO), Abai Region, and the Northern Balkhash. The initiative, covering a cumulative area of 250,000 square kilometers, is reported by inbusiness.kz, citing statements from Andres Blanco, the CEO of Xcalibur Multiphysics, a company specializing in aerogeophysical surveys.
Investors are anticipated to show increased interest in Kazakhstan’s geological exploration armed with geological data obtained through aerogeophysics, according to Mr. Blanco. The initial mapping phase is expected to be predominantly completed within the current year, with some tasks earmarked for 2025. At this stage, magnetic gravity technology will be employed for metal detection.
Following the interpretation of geological data, the second phase, likely to commence thereafter, will involve the utilization of electromagnetic and gravitational reconnaissance methods.
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Kazakhstan Senate Committee Discusses Geological Exploration Challenges
Members of the Senate Parliament’s Committee on Economic Policy, Innovative Development, and Entrepreneurship convened for an off-site session in Eastern Kazakhstan to address pressing issues in geological exploration. Prominent heads of geological companies and representatives from authorized bodies participated in the session.
Senator Shakarym Bukutgutov highlighted the historical significance of mining activities in the eastern region of the country, historically focused on tin, copper, lead, and other metals. However, reserves from previously explored deposits are dwindling. President Kassym-Jomart Tokayev has set a directive to expand geological surveys to 2.2 million square kilometers by 2026.
Notably, the export value of minerals in 2023 was six times higher than the industry’s investments, reflecting concerning statistics. Currently, Kazakhstan allocates a mere eight dollars per square kilometer for geological exploration, significantly lower than comparable countries like Russia, Uzbekistan, and the UK.
The industry requires substantial funding for modernization and development. Efforts are underway to digitize processes, with online portals facilitating licensing and reporting. Additionally, modern research methods such as remote sensing and spectral analysis are being employed to enhance exploration efficiency.
However, the sector grapples with severe staffing shortages, necessitating investment in training programs to equip the workforce with advanced skills. Collaboration with German universities aims to address these challenges and foster innovation in the field.
While the need for foreign investment is acknowledged, there is a call to increase state funding and restore the profession’s attractiveness through social incentives and recognition.
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Ministry of Industry and Construction Launches Pilot Project
In a significant move towards streamlining reporting processes, the Ministry of Industry and Construction of the Republic of Kazakhstan initiated a pilot project on March 5, 2024. This project aims to facilitate the submission of reports by subsoil users through a unified platform known as “Minerals.gov.kz”. Under this initiative, subsoil users are required to submit reports concerning their exploration and extraction operations in accordance with the Regulations for the Submission of Reports by Subsoil Users During Exploration and Extraction Operations, approved by the Minister for Investments and Development of the Republic of Kazakhstan on May 24, 2018, under Order No. 374.
The pilot project enables subsoil users engaged in exploration and extraction operations to submit various types of reports electronically. These reports include compliance reports on exploration of solid minerals, as per the format outlined in Appendix 1 of the Regulations, and compliance reports on extraction of solid minerals, as per the format outlined in Appendix 2 of the Regulations. Subsoil users are required to fill out electronic forms available on the “Minerals.gov.kz” e-platform and authenticate them using the electronic digital signature of an authorized representative empowered to provide such information.
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Kazakhmys Faces Ministry Notice Over Contract Violations
Kazakhmys has been notified by the Ministry of Industry and Infrastructure Development regarding breaches of obligations under multiple contracts for exploration and extraction of copper and other metals, reports Exclusive.kz citing “Kursiv.”
The ministry directed a notification to the company, signed by Deputy Minister of Industry and Infrastructure Development Iran Sharkhan, concerning violations of obligations under the contract for the extraction of copper-containing ores from the Zhilandy group deposits in the Karaganda region. The breaches include failure to meet investment plans, taxes, financing for research and development, and extraction.
The penalty for 2020 amounted to 71.2 million tenge, and for 2021, it was 27.3 million tenge.
In addition to the non-payment of research and development investments, the ministry identified serious violations under contracts for gold-copper-poly-metallic ore exploration, copper exploration, and extraction in various regions, including the Karaganda region.
Another company, Kazakhmys Coal, created in 2018 by spinning off coal companies “Razrez Molodezhny” and “Razrez Kuu-Chekinsky” from Kazakhmys, was also subject to inspection. It was found to have violated its contract for coal mining at the Borly deposit in the Karaganda region.
In total, violations totaling over 260 million tenge for 2020-2022 were identified, along with non-compliance with investments totaling over 300 million tenge. All violations were found in the Karaganda region. The company is required to rectify the violations within a month, otherwise, the ministry may take measures, including unilaterally terminating the contract.
The Ministry and the company have not commented on the information at this time. However, two weeks ago, the Ministry officially threatened to terminate a coal mining contract due to investment breaches by Shubarkol Premium, owned by Timur Kulibaev, the son-in-law of Nazarbayev, and Shubarkol Komir, owned by Alexander Mashkevich.
99.1% of Kazakhmys Corporation is owned by Kazakhmys Copper. The ultimate parent company is Kazakhmys Holding Limited, registered in the Astana International Financial Centre. Vladimir Kim, who owns 70% of the group, is Kazakhstan’s wealthiest businessman, with a fortune of $4.6 billion according to Forbes 2023. Eduard Ogay holds the 11th position among the richest Kazakhstani citizens, with a fortune of $750 million.
Exclusive.kz previously reported on the problem of underpayment by subsoil users for research and development in January 2023.