Alexei Natarov
Candidate of Geological and Mineralogical Science

A

s stated by the leadership of Kazzinc JSC, this company’s strategic task is to join the leading group of the world’s producers, which, as is known, includes Pasminco Ltd. and MIM Holdings Ltd. (Australia), Noranda Inc. and Cominco Ltd. (Canada), Asturiana de Zinc (Spain). Today, their aggregate share of the world production volume amounts to about 15% of refined lead and 25% of zinc. Many Chinese companies, particularly the Baiyin Non-Ferrous Metals Co., have achieved a high level of these metals’ production. China’s producers also lead in their supplies to foreign markets and, naturally, have an impact on markets’ conditions and development trends.
Specialists’ forecasts with respect to Kazakhstan’s role on the world market and plans of the metals’ producers in this country are based on sufficiently well-grounded prerequisites. Kazakhstan has a large mineral raw material potential of non-ferrous metals and developed metallurgical base, actively reforms its mining industry attracting foreign companies to develop major deposits and seeks to put out products of the world standards.
By the total reserves of lead, 16.4 million tons (7.8% of the world reserves), Kazakhstan ranks fourth in the world after Australia, the U.S. and Russia, while by the total reserves of zinc, 31.3 million tons (6.3% of the world reserves), it comes sixth after Russia, Australia, Canada, the U.S. and China. Kazakhstan’s proved reserves of lead are estimated at 11.7 million tons (10.1% of the world reserves) as its proved reserves of zinc amount to 25.7 million tons (9.5% of the world reserves). By these indexes the country ranks third in the world after Australia and Russia.
Kazakhstan’s largest deposits of lead and zinc are Zhairem and Shalkia. The proved reserves of lead at the former come to about 3,080,000 tons with the average content of 1.75%, while the proved reserves of zinc equals 6,560,000 tons with the average content of 3.77%. At present, lead as well as zinc reserves there are not developed. The proved reserves of lead at the Shalkia deposit amount to 2,160,000 tons with the average content of it in ores reaching 1.04% as its proved reserves of zinc are set at 7,700,000 tons with the average content of 3.71%. It is expected that after restoration works are completed the volume of ore mining by the Shalkiazinc JSC will reach 1.2 million tons year-on-year.
It is not ruled out that in the nearest years man-caused sources will also get involved in production of lead and zinc in Kazakhstan. According to the available information, industrial waste accumulated during many years’ activity of mining-and-metallurgical enterprises contains 1.4 million tons of lead, 27.7 million tons of zinc, 2 million tons of copper and 3,400 tons of silver.
Among countries of the CIS, Kazakhstan is traditionally the main zinc producer and, to a lesser degree, the supplier of lead. In 2004 the country put out about 316,000 tons of refined zinc and 150,000 tons of lead. At the same time, in the last decade the production of these metals has been growing by high rates averaging about 10% year-on-year. And that is quite commensurable with China’s indexes. In 2005 Kazakhstan’s enterprises are expected to produce about 350,000 tons of metallic zinc and 220,000 tons of lead. Thus, by its zinc output, Kazakhstan will surpass Belgium, France, Russia, Brazil, Mexico, while the country’s lead production will be higher than that in Belgium, Spain, Italy, France, Peru and get close to the Canada’s and South Korea’s volumes.
Lead and zinc are produced in Kazakhstan mainly at enterprises of the Kazzinc JSC, a 62.4% stake in which belongs to Glencore International AG. The raw material base of its production facilities is provided by complex ores of the Maleevskoye, Ridder-Sokolnoye and Tishinskoye deposits, which are processed at the Ust-Kamenogorsky Metallurgical Complex (UK SZK) and the Leninogorsky (currently - Riddersky) Mining-and-Metallurgical Integrated Plant. In the summer of 2006 UK SZK and Riddersky Plant will start getting ores from the explored Shaimerden deposit, where the proved reserves of zinc are estimated at 910,000 tons with the average content of it in ore amounting to 2.1%. It is planned to put out up to 60,000 tons of zinc year-on-year from ores of this deposit.
In 2004 Kazzinc produced 98,700 tons of refined lead and 293,300 tons of zinc; that brought the production growth to 11.8% and 6.1% respectively as compared with the preceding year. Just for comparison: Pasminco Ltd puts out no less than 250,000 tons of metallic lead and 550,000 tons of zinc; MIM Holdings Ltd. produces 335,000 tons of lead and 340,000 tons of zinc; figures for the companies Noranda Inc., Cominco Ltd. and Asturiana de Zinc come to 80,000 tons and 570,000 tons, 95,000 tons and 350,000 tons, about 450,000 tons (of zinc) respectively. So, in order to join this group of leaders, Kazzinc should totally produce no less than 500,000 tons of these metals year-on-year. Judging by the growth trend, this task may be accomplished in the near future.
Besides Kazzinc, lead and zinc are being put out by Kazakhstan’s other enterprises as well. The company Yuzhpolimetall that operates on the base of the Shymkentsky lead plant produces about 60,000 tons of lead year-on-year. Quite recently the corporation Kazakhmys, the country’s leading producer of copper, got down to putting out zinc as well. In 2004 this corporation produced 22,700 tons of zinc at the Balkhashsky plant.
Today, capacities of metallurgical production facilities exceed the ones of their raw material bases more often than not. For example, the Balkhashsky plant is designed to produce 100,000 tons of zinc. Due to the absence of concentrates the Shymkentsky plant started processing lead dusts and cakes.
Kazakhstan ships almost all volume of produced metals to foreign markets. By our estimate, in 2004 it exported no less than 135,000 tons of refined lead and 270,000 tons of zinc. By volumes of its export shipments, Kazakhstan ranks fourth, after China, Australia and Canada. At the same time, between 1995 and 2003 the export volumes increased 2.35 times as the lead export shipments averaged 8% a year and shipments of zinc abroad grew up 12%. With such rates of the annual export growth Kazakhstan can reach the current Chinese level of zinc export shipments already by the end of this decade.
There is no doubt that China will remain the leading player on the market of non-ferrous metals but its export potential will apparently get reduced due to the considerable depletion of its own mineral raw material base and growing domestic needs for lead and zinc. At present, the Chinese production of refined lead reaches 1.58 million and the volume of zinc output amounts to 2.54 million tons. This accounts for about 23% of the world production volume as regards each of these metals. With maintaining these production volumes, explored reserves of complex ores in China will be depleted in the nearest 7 to 10 years.
China’s national companies are actively looking for sources of raw materials abroad, including Russia, Mongolia, Australia and Kazakhstan. For many years China was importing raw materials, mainly lead concentrates. In 2003 the imports volume amounted to between 200,000 and 225,000 tons rising almost ten times as compared with 1995. Foreign experts explain the increase in demand for lead by the sharp growth of the country’s motor vehicle fleet that, therefore, results in the similar growth in demand for accumulators.
In recent years China also raised imports of zinc concentrates, the volume of which, by our estimate, amounted to about 350,000 tons (in the metal’s terms) in 2004. Imports of refined zinc is also growing up rapidly: in three years the volume increased 13 times.
The comparison of the mineral raw material bases and production potentials of the lead-and-zinc industries in Kazakhstan and China as well as the trends of their development makes it possible to conclude that already in 10 years Kazakhstan will have a real chance to become one of the main world producers and exporters of these metals and, therefore, will seriously rival China in this sphere.
The successful accomplishment of this task will depend, to a large extent, on foreign investments and participation of foreign companies in developing Kazakhstan’s big deposits of lead and zinc. At present, Kazakhstan’s complex deposits are of great interest to companies from South Korea, Great Britain, Switzerland, Japan and the U.S. In 2002 the aggregate volume of their investments amounted to $560 million. Russia’s contribution is two times less, just $5 million. But by using its traditional ties the country is also capable of actively participating in development of deposits in Central Kazakhstan, above all, the dormant Zhairem deposit, which was discovered and prospected with active participation of Russian geologists as far back as the 1960s. This deposit is a unique natural collection of manganese and lead, which the Russian industry badly needs.



Picture1. Reserves of zinc and lead in Kazakhstan and China in 2003, million tons.

million tons
45
40
35
30
25
20
15
10
5
0

31.3 39.4 25.7 7.3 16.4 14.5 11.7 7.2

Total reserves of zinc
Proved reserves of zinc
Total reserves of lead
Proved reserves of lead
Kazakhstan
China


Picture 2. Dynamics of exports in China and Kazakhstan, thou tons.

thou tons
500
450
400
350
300
250
200
150
100
50
0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
163 57 246 59 186 78 236 75 360 58 448 155 448 128 400 129 376 135 435 140

China
Kazakhstan


Picture 3. Dynamics of zinc export shipments in China and Kazakhstan, thou tons.

thou tons
600
550
500
450
400
350
300
250
200
150
100
50
0

181 147 217 150 544 150 371 150 507 170 575 229 544 236 473 263 448 270 224 287

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
China
Kazakhstan