At the recent V Forum of Gold Industry in Astana, Aida Alzhanova, Deputy General Director for Strategic Development of Polymetal Eurasia, discussed the current state of the industry and the company’s business growth plans.
Aida addressed concerns about the depletion of the mineral resource base in the gold mining industry, despite experts’ optimism about Kazakhstan’s subsurface resources. The industry faces significant challenges, including the depletion of the mineral resource base, which is seen as a fundamental issue. Gold mining companies are increasing production rates annually, but the real growth in reserves is slow, with exploration and preparation of deposits taking seven to eight years on average. No major gold deposits have been discovered since independence, and many operations rely on Soviet-era discoveries. Some enterprises consider short-term extraction of off-balance ores, and some plants continuously seek external raw materials.
Two primary reasons for these challenges are the low investment attractiveness of geological exploration, especially greenfield, and the bureaucratic process of obtaining permits for sample export for research. Investment incentives, such as real VAT exemptions for both subsoil users and service companies, are seen as effective tools. A significant issue for the entire mining sector is the non-return of payable VAT, which deters investors.
Another major challenge is the low intensity of geological exploration. A bureaucratic process hampers the export of samples for analysis, with delays due to local accreditation requirements. The only internationally accredited laboratory, ALS Kazgeokhimia, is overloaded, with standard analyses taking 45 to 60 days, which is too long given the short field season in many regions. Accelerating exploration would benefit from the launch of a digital geological information database, which would facilitate AI implementation, expedite site selection, and increase the chances of discovering good deposits.
To replenish the mineral resource base, Polymetal Eurasia actively collaborates with junior companies. The 2017 Subsoil Code simplified exploration rights acquisition, boosting domestic junior business and improving geological study quality. The company has about 20 exploration licenses and several for geological study, covering over 70,000 square kilometers. They are also developing digital solutions for managing large volumes of geoinformation and constructing an analytical laboratory with a capacity of 200,000 samples per year.
Following the sale of Russian assets and the company’s rebranding to Solidcore Resources plc, Polymetal’s focus has shifted to prioritizing Kazakhstan. The strategy involves developing processing hubs in eastern and northern Kazakhstan and pursuing greenfield projects to establish new hubs. Long-term growth involves acquiring new deposits with assessed or ready-for-final-evaluation reserves, with domestic junior companies being key partners in this endeavor.
Polymetal plans to invest approximately $1 billion, primarily in building a metallurgical plant in Pavlodar (Irtyshsky GOK) and expanding the company’s asset portfolio, including exploration and M&A activities.
