Vladimir Shkolnik
Minister of energy and mineral resources, Republic of Kazakhstan

    Kazakhstan’s mineral raw material base is one of the largest in the world. It serves as the most important pillar of the country’s economy and a guarantor of its economic security. This base ensures a steady operation of the mining-and-metallurgical complex. The republic’s mineral resources account for 13.2 % of the world’s proved positive reserves of zinc, 12 % of lead reserves, 38 % of chromite reserves, 8 % of manganese ores, 19 % of uranium reserves, 46 % of barite reserves, 8 % of phosphorite reserves, 53 % of rhenium reserves. By its proved reserves of oil, iron, copper, tin, gold, boron and potassium salts Kazakhstan is among the world’s 10 leading countries.
The republic plays a significant role in the world markets of mineral raw materials and has much influence in the Euro-Asian region. Russia’s ferrous and aluminum industries are closely connected to Kazakhstan’s mineral raw material base. There is an obvious raw material dependence of Uzbek metallurgical mills on Kazakh lead and zinc since they are lacking their own resources.

KAZAKHSTAN’S LAWS ON SUBSOIL USE

The landmark in the history of developing subsoil use in the republic of Kazakhstan is connected to the approval of two most important normative and legal acts – the presidential orders having the force of law – «On oil» dated June 28, 1995, and «On subsoil and subsoil use» dated January 27, 1996. The last one contains a special provision on license and contract system as well as rights for subsoil use. Between 1996 and 1998 these acts were supplemented with resolutions of Kazakhstan’s government, which specified procedures of obtaining rights for subsoil use and of making contracts. The next stage was marked by significant changes of those two basic acts made by the law adopted on August 11, 1999. These changes were necessary because a number of questions remained not fully settled. Besides, there was a need to take into account wishes of foreign investors concerning simplification of the legal regime of subsoil use so as to raise the investment attractiveness of Kazakhstan’s economy. The important point of this law is a renunciation of the license and contract system of providing rights for subsoil use and adoption of the contract system that makes the whole procedure easier. Along with these normative and legal acts relations in the area of subsoil use are regulated by «Rules of providing rights for subsoil use in the Republic of Kazakhstan» adopted by the government’ decision on January 21, 2000. Also, a new model contract for operations in subsoil use and other normative documents for the industry have been put into effect. In particular, this model contract specifies obligations of subsoil users with respect to training Kazakh personnel, hiring Kazakh specialists, applying Kazakh equipment, creating a liquidation fund, etc. Work is being done now to formulate a provision that will regulate arranging and holding tenders for services needed in oil production. Such a provision became necessary with inflow of foreign investments that called for a revision of emerging relations. There is an urgent issue of providing legal support of investors’ interests. Besides, there was a need to secure a basis for forming and conducting a common state policy in oil production. Planned changes are in no way aimed at hurting rights of investors. As before, Kazakhstan is devoted to the course of economic reforms. The republic is interested in attracting foreign investments in any projects and types of activity concerning subsoil use, in all permitted organizational and legal forms either by setting up companies fully owned by foreign investors or by establishing enterprises with foreign participation as well as their branches and agencies.

    The volume of marketable production by Kazakhstan’s mineral raw material complex including metal processing and refining of oil accounts for 68 % of the republic’s total industrial production. The mining industry’s share of the GDP amounts to more than 25 %. About 20 of 40 main kinds of fuel-and-energy and metallic mineral resources are extracted and processed with a high degree of finishing.
Products supplied by the mineral raw material complex account for over 80 % of the republic’s exports. The share of the oil-and-gas complex amounts to more than 48 % and the share of the mining-and-metallurgical complex equals 32 %.
The republic’s ferrous metallurgy has a reliable raw material base as well. By reserves of ores and metal output Kazakhstan is included in the first ten leading countries of the world. What is more, Kazakhstan is placed second in the world by reserves and production of chrome ores.
Proved reserves of ferrous metal ores permit to ensure a long-term operation of mining enterprises. The manganese sector possesses the largest reserves, which are estimated to last for over a hundred years. Mining enterprises of the chrome sector have reserves for over 60 years and enterprises of the iron ore sector are provided with reserves for more than 49 years.
The development of ferrous metal deposits is not as intensive as in other leading countries and this leaves room for expanding operations of the industry’s mining and processing enterprises. The industry’s prospects depend not only on possible increase of supplying ores, concentrates and products for further process stages but also on their more thorough processing and manufacturing a wider range of goods for domestic consumption as well as exports.
In the first half of 2002 the production of flat rolled stock increased 4 % as compared with the same period last year. At the same time the production of steel, ferroalloys and marketable iron ore jumped up 3 %, 9 % and 16 % accordingly against the first six months of 2001. The republic’s mining-and-metallurgical enterprises are successful in the efforts to improve quality of products and to raise their competitiveness in foreign markets. Development of technologies will contribute to the increase in content of useful components of marketable ore and reduction of effect from harmful impurities. Modern smelting complexes are put in operation to make products, which are new to Kazakhstan’s enterprises like titanium slag used as a raw material for obtaining metallic titanium.
The raw material base of the non-ferrous industry’s sectors can be best described by the following statistics. The republic is placed 5th in the world by reserves of copper, 4th by reserves of lead and zinc and 10th by reserves of bauxites. If compared with leading countries, Kazakhstan has a rather low level of developing the raw material base of non-ferrous metals. For example, in 2000 the development of active balance reserves of non-ferrous metals covered from 0.8 % to 2.2 % of them. Meanwhile, main extracting capacities have guaranteed reserves of bauxites for 30 to 40 years, of copper for about 20 years, of lead and zinc for 20 to 30 years. The analysis of the mineral raw material base of non-ferrous metals shows that the republic possesses enough reserves till 2030, which will be profitable to develop in the existing market conditions.
The available data on volumes of long-term domestic consumption and mineral raw material export give an idea of future developments in the non-ferrous metallurgy. The maximum volume of copper concentrate production of over 500,000 tons is expected in 2011 to 2025. The maximum level of zinc production exceeding 480,000 tons may be reached in the years from 2005 to 2020. The highest volume of lead production (over 100,000 tons) will be achieved possibly between 2010 and 2030.
In the first half of 2002 the production of alumina, fine copper, metallic zinc and galvanized rolled stock increased 10 %, 5.4 %, 6 % and 13 % accordingly as compared with same period of 2001. At present the republic’s enterprises are being prepared for a start-up of capacities to reprocess substandard high-sulfur concentrates of non-ferrous metals using advanced technologies based on the foreign experience. The feasibility study of constructing an electrolysis mill in the city of Pavlodar to produce metallic aluminum with an annual capacity of 240,000 tons has been completed.
One of the important components of Kazakhstan’s mining-and-metallurgical sector is the gold-bearing ore branch. By reserves of gold Kazakhstan is placed 8th in the world. Taking into account the available raw material base volumes of its recovery in the past years have been insignificant. For example, in 2000 the development of active balance reserves of gold covered just 1.3 % of them. At the same time main extracting capacities have reserves sufficient for 20 to 30 years. The actual provision of many enterprises is much less. Most of the republic’s gold reserves consist of rebellious ores. Their processing requires new technologies and considerable starting expenses. Having large reserves, enterprises, nevertheless, often develop free-milling oxide-bearing ores because the rest is usually inactive.
Considering needs of the domestic and foreign markets, prospects for development of the gold-bearing ore branch are as follows. The maximum production of gold (over 100 tons) using raw materials directly from gold fields is possible between 2006 and 2015. The highest level of recovering gold at the complex fields exceeding 40 tons may be reached in 2011 to 2030.
Conditions of reproducing reserves of mineral raw materials are getting harder with every passing year. At the same time Kazakhstan’s subsoil is much richer than was thought in the past. Estimated hypothetical reserves of most kinds of mineral resources exceed the predicted ones by 2 to 3.5 times and more. New and nontraditional types of fields have an enormous potential for expanding the mineral raw material base. However, their metallogeny is not sufficiently studied yet. That is why, to secure a priority development of the republic’s mineral raw base it is necessary to intensify regional research, to perfect the methodology of predictions, to expand explorations.