During a recent working trip to the Issyk-Kul region, Akylbek Japarov, the Prime Minister and Head of the Administration of the President of the Kyrgyz Republic, visited the operations of the closed joint-stock company “Kumtor Gold Company.” The Prime Minister toured the plant’s machinery workshop, where he inspected the assembly of new excavators and refueling stations. Currently, the mine utilizes over 800 various types of transportation vehicles, machinery, and equipment. Japarov also visited Kumtor’s main quarry, where a project for underground gold mining has been underway since February of this year. According to estimates, the project aims to extract approximately 115 tons of gold. As reported by the cabinet, gold extraction from the mine’s ore waste, located in the tailings facility, is planned to commence from 2026. Preliminary calculations suggest an additional yield of 120 tons of gold through this initiative. In 2023, Kumtor mine yielded 13,567 tons of gold, generating a total revenue of $848 million with a net profit of $302.5 million.
Tag: Mining industry
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Uzbekistan’s Ambitious Rare Earth Investment Plans
Uzbekistan is set to make a bold move into the rare earth market with plans to invest $500 million in rare earth projects, aiming to position itself as a major producer in Central Asia. President Shavkat Mirziyoyev unveiled this ambitious endeavor, emphasizing the country’s commitment to developing existing deposits and exploring new ones.
The mining industry in Uzbekistan has already demonstrated significant economic potential, reaching a production volume of nearly $11 billion last year, primarily driven by precious and non-ferrous metals. However, the focus now shifts towards tapping into the untapped potential of critical minerals, including rare earths. A 2018 study by the U.S. Geological Survey identified 87 deposits of rare earths and rare metals within the country, laying the foundation for Uzbekistan’s strategic investment in this sector.
The European Union emerges as a potential key market for Uzbekistan’s rare earth exports, aiming to reduce its reliance on rare earth imports from China. Just over a month ago, Uzbekistan signed a memorandum of understanding with the EU on critical raw materials, signaling a promising avenue for future collaboration and trade partnerships.
Meanwhile, neighboring Kazakhstan, linked to the EU through its own raw materials agreement, has also announced a significant expansion of its rare earth industry. With 15 deposits of rare earth metals and 160 rare earth element-bearing mineral occurrences, Kazakhstan presents formidable competition in the regional rare earth market.
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Cornish Metals Receives Favorable Assessment for South Crofty Tin Project
Cornish Metals expresses satisfaction with the Preliminary Economic Assessment (PEA) conducted independently for the South Crofty tin project in Cornwall, heralding promising financial prospects. The base case after-tax Net Present Value (NPV) of US$201 million and an Internal Rate of Return (IRR) of 29.8% validate the project’s potential to operate as a cost-effective mine, according to Cornish Metals. Projected estimates, based on a 14-year life of mine (LOM) and a tin price of US$31,000 per tonne, foresee South Crofty yielding a clean, high-grade tin concentrate. With the PEA indicating a payback of upfront capital expenditure within three years and a projected total revenue of US$626 million over the project’s lifespan, Cornish Metals underscores the financial viability of South Crofty. The forecasted all-in sustaining cash cost (AISC) of US$13,661 per tonne positions South Crofty as a competitive player in the tin production market, notes Cornish Metals. Over the 14-year LOM, the project anticipates producing 49,310 tonnes of tin metal in concentrate, maintaining an average annual tin production exceeding 4,700 tonnes for years 2 through 6, with a peak of over 5,000 tonnes in year four. Owen Mihalop, the chief operating officer, highlights the NPV as a robust starting point for further project evaluation, signaling Cornish Metals’ progression towards a construction decision and targeted first tin production in 2027. Ken Armstrong, interim chief executive, emphasizes the significance of the PEA as a pivotal step towards responsible tin mining revitalization in Cornwall and the UK, underscoring South Crofty’s strategic advantages in terms of existing permits and infrastructure.
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First Quantum Minerals Launches Extensive Geological Survey Project in Kazakhstan
First Quantum Minerals (FQM) has unveiled plans for extensive geological survey operations in Kazakhstan, aiming to identify promising copper deposits, as reported by inbusiness.kz. Last year saw the establishment of FQM’s Kazakhstan division in Astana, accompanied by the recruitment of local personnel, signaling the company’s commitment to local engagement and investment.
According to geologist James Banyard, overseeing FQM’s activities in Kazakhstan, the company’s specialists will commence geological surveying activities in the summer of 2024. Initial efforts will focus on mapping and geophysical exploration of subsurface formations, laying the groundwork for potential mining endeavors.
In collaboration with Pallas Resources, an existing partner in several projects, FQM aims to execute its strategic vision of a five-year presence in Kazakhstan, with aspirations to discover lucrative copper-rich sites worthy of future investment.
Currently, the company is in the process of securing exploration licenses for multiple sites across various regions of the republic. Prospecting efforts will primarily target areas with known concentrations of copper ore, including the Balkhash-Ili territories, Bozshakol-Chingiz, and the Chu-Sarysu basin.
FQM’s foray into the Kazakh market follows the enactment of the Subsoil Code in 2018, reflecting the company’s strategic assessment of risks and opportunities within the region. Despite the inherent challenges, FQM remains optimistic about the prospects of collaboration in Kazakhstan’s burgeoning mining sector.
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Kumtor Gold Company to Pay Kyrgyzaltyn $151.3 Million in Dividends
Kumtor Gold Company (KGC) has announced its plans to pay Kyrgyzaltyn $151.3 million in dividends. This amount exceeds the 2022 figure by $11.3 million when Kyrgyzaltyn received $140 million. According to KGC’s financial report, the company’s net profit amounted to $371.721 million last year, marking a 59.4% increase from 2021.
It’s worth noting that with the dividend payout by Kumtor, Kyrgyzstan’s total income from the gold mining company for 2022 and 2023 will reach $291.3 million. This nearly triples the dividends received by Kyrgyzstan from Canadian company Centerra Gold Inc. between 2010 and 2021, which amounted to $101.7 million.
Recall that Kumtor fully transitioned into Kyrgyzstan’s ownership on July 29, 2022, following the exchange of relevant documents at the Kyrgyzstan Embassy in the United Kingdom.
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14th MINEX Kazakhstan Forum in Astana: Sustainable Development in Mining Industry Takes Center Stage
Astana, Kazakhstan – The 14th Mountain Geological Forum, MINEX Kazakhstan, commenced its proceedings, focusing on the theme of “Sustainable Development of the Mining Industry for the Benefit of Society and the Environment.” Over 450 specialists from 235 companies and organizations spanning Kazakhstan and 32 countries across Europe, Central Asia, North and Latin America, Africa, Southeast Asia, the Middle East, and Australia are participating in the event.
More than 50 Kazakhstani and international companies are showcasing cutting-edge technologies for prospecting, extraction, and processing of mineral resources at the forum’s exhibition. Attendance by approximately 1000 specialists from Kazakhstan and abroad is anticipated.
Of notable significance this year is the record participation of foreign investors at the forum, demonstrating keen interest in exploring and developing deposits of precious metals, copper, coal, lithium, uranium, as well as rare and rare-earth metals.
During the plenary session, the Executive Director of AGMP, Nikolai Radostovets, addressed the key directions for the development of the mining and metallurgical industry in Kazakhstan. He emphasized crucial tasks such as replenishing the mineral resource base, enhancing domestic value, and raw material processing.
With the depletion of the mineral resource base and the decline in the content of useful components in ore, there is a pressing need to increase geological exploration activities and provide incentives for investments in geological exploration. In this regard, the association’s leader proposed revising the algorithm for accounting and taxing expenditures on geological exploration. Specifically, he suggested refining the Tax Code to allow deductions for all expenses on geological exploration regardless of the allocation of individual sites into new contracts, as well as establishing deductions for corporate income tax on expenditures for geological exploration of solid minerals through existing extraction contracts.
To incentivize involvement in raw material processing, he proposed enshrining several provisions in legislation. These include exempting subsoil users’ non-extractive mineral resources from the mineral extraction tax (MET) and not levying fees for their re-placement after processing. Regarding non-state-owned mineral resources, extraction should proceed as per current regulations, with a reduced MET rate applied to stimulate their processing.
Addressing tasks related to enhancing domestic value, Radostovets highlighted AGMP’s comprehensive approach aimed at satisfying the needs of domestic manufacturers and mitigating risks for subsoil users in procurement.
“We plan to convene with domestic manufacturers at the NPP platform shortly and propose that for the products that Kazakhstani enterprises can produce, we will enter into off-take contracts,” he specified. “We are prepared to compile and approve a list containing the range of goods manufactured in Kazakhstan or those that can be produced in the medium term. For other types of products, we should have open procurement under standard conditions, possibly from a single source, as these are goods not produced in Kazakhstan.”
The Executive Director of AGMP also underscored the development of raw material processing in Kazakhstan, recalling legislative amendments enacted for licensing metal exports. These amendments, effective from October of the current year, will only grant export licenses if metallurgical enterprises fulfill certain obligations and meet domestic market demands. He noted the association’s preference for stimulating enterprises to process natural resources within the country to foster the development of metal processing and the establishment of metallurgical clusters.
“Investment agreements, processing agreements have not yet kicked off,” expressed R. Baimishev. “There hasn’t been a single agreement with an investment volume of $50 million. Yet, there are proposals to increase them by 10 times – up to $500 million. We believe these are premature steps. Furthermore, we believe it is necessary to stimulate the development of deeper horizons. Mine construction requires substantial investments and government support,” he observed.
In turn, the Chairman of the Board of AO “National Mining Company “Tau-Ken Samruk” Bakyt Chirchikbayev provided an update on the completion of the transfer process of 100% of the shares of AO “NGC “Kazgeology” to “Tau-Ken Samruk” in September of the previous year. He outlined steps taken to optimize management processes, reduce costs, and eliminate duplicate functions, such as merging functions related to geological exploration and joint project implementation with foreign partners. Following the consolidation of these functions, their asset portfolio comprises 53 geological exploration projects, with collaboration involving more than 15 participants.
“It can be noted that we have become a sort of unified window for investors in the geological exploration sector for developing joint projects, and we see ourselves as minority participants in the development of these projects to avoid burdening quasi-state companies with such requirements and to manage companies more flexibly,” he remarked.
Chirchikbayev emphasized that the company’s geologists are currently exploring promising directions and have already identified several prospective sites. “Tau-Ken Samruk” is open to partners, including junior companies, for the development of these projects.
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Joint Venture “Kogodai” Plans to Resume Copper Exploration in Eastern Kazakhstan
The joint venture “Kogodai,” holding a license since 2013 for the exploration of copper and associated metals in the Kogodai area of the Kurchum district of the East Kazakhstan region, intends to resume copper exploration in the region. Between 2014 and 2023, the company conducted geological exploration, resulting in the estimation of mineral resources categorized as inferred. Now, “Kogodai” plans to conduct geological exploration in all previously established and assumed 10 mineralization zones of the Kogodai site, the Lotoshnoye site, two geophysical anomalies, and continue the exploration of the Kogodai deposit. This information was disclosed in materials for public hearings scheduled in the Maraldy village of the Kurchum district on April 12.
The geological exploration area covers 52.2 square kilometers. Search routes on foot will be executed within the contractual territory. Drilling is planned to be carried out using mobile drilling rigs of the SKB-5/LF-90 type with the use of Boart Longyear drill bits, which will require 59.6 thousand liters of diesel fuel in 2024.
For the power supply of the field camp, three gasoline generators FPG 9800E FORZA will be used. The fuel consumption of one generator will be 2.78 tons per year.
Coring drilling of exploration wells is envisaged for exploring ore bodies at depth. Most of the planned wells will be drilled to a depth of 200-250 meters. The total volume of coring drilling will include 20 wells with a total volume of 3000 linear meters.
Cores extracted from core barrels (samples in the form of cylindrical columns) will be washed and placed in core boxes. As the wells progress, a label indicating the depth will be attached after each run.
The participants of the JV “Kogodai” are the social entrepreneurship corporation “Yertis” (belongs to the financial management of the akimat of the East Kazakhstan region) and the company “Orsu Metals Kazakhstan,” a subsidiary of Harrsin Management B.V., whose ultimate beneficiaries are not disclosed.
In the 2010s, the copper projects Kogodai and Karchiga in the East Kazakhstan region were developed by the British company Orsu Metals, registered on AIM (one of the platforms of the London Stock Exchange). The company faced difficulties in financing projects and delisted its shares from AIM in 2016.
Earlier this year, Citibank forecasted that an increase in green energy targets would increase copper demand by an additional 4.2 million tons by the end of the decade. In this case, copper prices could reach $15,000 per ton by 2025, which is 75% higher than the price of copper at the beginning of January. On April 9th, investment bank analysts noted that the price of copper on the London Metal Exchange approached $9,500 per ton, trading near 15-month highs.
Last summer, the village of Maraldy was often mentioned in the headlines due to the dissatisfaction of the local population with the plans of the company “VSAM Production” to build a gold mining plant for 250 thousand tons of ore per year. Near the village, geological exploration companies Maralicha and Maralicha-Gold were searching for gold. Gold mining was planned to be conducted by open-pit mining – local residents feared the contamination of springs and the river by harmful substances, as well as other possible issues due to mining activities.
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llegal Gold Trafficking Cases in Kazakhstan Result in Over 1.5 Billion Tenge Loss
In a recent report, it has been revealed that Kazakhstan has seen a surge in illegal gold trafficking cases between 2020 and 2023. Senator Andrey Lukin disclosed that during this period, authorities investigated seven criminal cases related to the illegal circulation of gold, with four cases being forwarded to court. The financial losses incurred from these activities have surpassed 1.5 billion Tenge. Lukin further elaborated that the General Prosecutor’s Office registered 133 criminal offenses associated with illegal gold trading, extraction, and embezzlement over the past four years. Currently, the country hosts 42 gold mining enterprises. Lukin cited a case from November 2023, wherein law enforcement dismantled a criminal group involved in purchasing illegally mined gold from “black miners.” The seized gold was later used to produce counterfeit products resembling renowned brands, which were then sold in Astana and Shymkent. The operation resulted in the confiscation of over 1 kg of gold and 100 counterfeit items. Lukin emphasized the need for stricter surveillance at gold mines to combat such violations. He estimated that for every three tons of legally mined gold, there is one ton mined illegally, accounting for approximately 25 tons of illegally sourced gold annually nationwide. Lukin proposed bolstering security measures at mining sites, including installing additional surveillance cameras, equipping mine shafts with fiber optic channels, implementing access control systems, utilizing screening complexes, erecting dual fencing, deploying automatic detection sensors, and other safety measures.
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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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Potential Gold and Silver Reserves Found in Hungary’s Börzsöny Mountains
Recent calculations by Hun-Mining Research, Development, and Innovation Ltd. reveal a promising discovery in northern Hungary’s Börzsöny mountains, estimating approximately 1,000 tons of gold and silver deposits at a depth of about 150 meters, as reported by Origo. This discovery surpasses the gold reserves held by the Hungarian National Bank, standing at 100 tons, with potential gold values reaching around EUR 59 billion. The envisioned concession mining rights could potentially unlock 9,000 tons of gold and an equivalent amount of silver over an estimated operational span of 42.5 years, providing employment for 1,200 individuals and establishing Hungary’s most lucrative gold and silver mines. After five years of meticulous research and technical preparation, including documentation for mining authorities, plans for the new gold mine are underway. Utilizing washing technology based on deep drilling results aims to eliminate the use of cyanide, adhering to EU regulations following past environmental incidents. The process of awarding concession mining rights will involve an international tender, with operations projected to commence within five years. With significant resources identified in the Nagyírtáspuszta-Rózsabánya region, this project holds the potential to transform into one of the world’s largest gold deposits, promising substantial social and economic benefits for the area.