Kazakhstan’s Prime Minister Serik Akhmetov urged the Ministry of Industry and New Technologies to prepare before 1 July 2014 the concept of the new Mining Code to ensure Kazakhstan’s competitiveness in attracting international investment in mining and oil & gas exploration. In his official statement Mr Akhmetov confirmed that the last large-scale exploration programs were funded by the state and conducted by Kanysh Satpaev in the 1950.
Pressurised by the low metals prices and the need to reduce production costs, mining companies are quickly depleting their reserves and have no choice but to start closing mines which have become uneconomical. This in the near future will be putting extra pressure on the local companies and the government to find new jobs and relocate thousands of people. Faced with the lack of experienced exploration teams and technologies, Kazakhstan urgently needs to create incentives for the international teams and investors to come in the next two-three years and commence new exploration projects. Historically, foreign investors did not have problems to secure property rights in Kazakhstan as it was a case with some other countries in the region. The main obstacles such as bureaucratic procedures and access to the geological information are likely to be removed by the new Mining Code. Investors might also receive tax and other incentives.
According to Aset Isekeshev, Minister of Industry and New Technologies of Kazakhstan, Rio Tinto, a British-Australian multinational metals and mining corporation, is going to spend over 13 million US$ on geological exploration at the initial stage of its operations in Kazakhstan while the Government is planning to invest in the next five years over 1 billion US$ in funding exploration. Earlier Minister Isekeshev has announced that after studying mining practices of other countries, Kazakhstan has developed a model which will be primarily based on Australia’s practices to attract investments into the geological exploration sector. Compared to Australia’s 23 000 licenses for geological exploration and a great number of smaller exploration companies, presently Kazakhstan has only 400 contracts and is challenged with the immense task to change the situation in order to attract investors.
The swiftly unfolding developments in the Mining and Exploration in Kazakhstan and across Central Asian states will be addressed at the MINEX Central Asia – the 5th International Mining and Exploration Forum to be held in Astana from 31 March to 2 April 2014. A panel discussion on Private Equity investment opportunities in Kazakhstan, Tajikistan and Kyrgyzstan will be held during the MINEX Central Asia Forum brining the views and experiences of the local and international Private Equity funds. In addition to the panel discussion, investment funds will be offered opportunities for meeting with the senior Government officials and National Geological Administrations to review potential business opportunities in the region’s mining sector.
A round table consultation discussion on the proposed new Mining Code of Kazakhstan will be held alongside the Forum offering an opportunity for both the international and local companies to express their views and suggestions on creating sustainable mining practices to attract the new generation of global investors and uncover new large scale projects.