Mining industry


The mining and smelting industry is fed by a rich mineral resources base with substantial capacity, both in the context of the country and across the globe. Kazakhstan is ranked sixth in the world in terms of its amount of mineral resources. Out of the 110 elements in Mendeleyev’s periodic table, 99 have been discovered, 70 explored, and 60 are being recovered and used in Kazakhstan’s soil.

Kazakhstan has 30 percent of the global reserves of chrome ores (second place in the world), 25 percent of manganese ores and 10 percent of iron ores. Reserves of copper, lead and zinc are 10 to 13 percent respectively of the world reserves. Specific density of wolframium is 60 percent (first place in the world), bauxite is 30 percent, and phosphorite is 25 percent (second place in the world). The country
occupies fourth place globally in terms of lead and molybdenum reserves and eighth in terms of total
ironstone reserves (16.6 billion tonnes).

Kazakhstan is in third place in the world in terms of production of titanium, seventh for zinc, eighth
for lead, thirteenth for iron ore, fifteenth for copper and thirty fifth for steel. Kazakhstan’s mining industry accounts for approximately seven percent of the country’s GDP and 19 percent of industrial production. Its mineral and resources base consists of 5,004 fields with a net worth of $46 trillion. About 80 percent of all mining industry products are exported to more than 30 countries, making 20 percent of the total exports and 30 percent of the country’s revenues.

According to the State Statistics Agency, the volume of production in the mining and smelting industries
for the period January-December 2011 amounted to KZT 10.0 trillion ($67.1 billion) (growth of 1.3 percent), including production of metal ore at KZT 798.2 billion ($5.3 billion) (+0.4 percent) and iron ore at KZT 336.3 billion ($2.2 billion) (+1.7 percent). The volume of the iron and steel industry in current prices amounted to KZT 1.9 trillion ($13.0 billion), with a volume index of +6.5 percent. The volume of production consisted of metallurgy with KZT 785.4 billion ($5.2 billion) (+5.6 percent), precious and non-ferrous metals with KZT 1.1 trillion ($7.7 billion) (+7.2 percent) and cast iron with KZT 7.1 billion ($47.4 million) (+1.1 percent). The growth in iron and steel production was due to the expansion of cast iron (3.1 million tonnes, +8.5 percent growth), crude steel (48.0 million tonnes, +12 percent), flatrolled steel (30.9 million tonnes, +6.6 percent) and metal pipes of different diameters (188.1 tonnes, +18.4 percent).

Domestic demand for ferrous metals supported the machinery industry, which grew by 19.6 percent in 2011 compared with the same period last year, when machinery and equipment production increased by 12.8 percent. In non-ferrous metal production, growth was achieved by increasing production of raw silver (644.6 tons, +16.8 percent), of which refined silver amounted to 640.6 tons (growth by +16.7 percent). Raw gold production rose by 6.4 tonnes to 36.6 tonnes (+21.1 percent), of which refined gold accounted for 16.6 tonnes (+23.6 percent). Raw aluminum production increased by 514,000 tons to 19.2 million tonnes (+2.8 percent), crude lead by 784,000 tonnes to 1.1 million tons (+7.6 percent), zinc by 894 tonnes to 3.1 million tonnes (+0.3 percent) and refined copper by 154,000 tonnes to 3.4 million tonnes (+4.6 percent).

Compared to the same period in 2010, exports of mining and steel products in 2011 amounted to
$113.7 billion (+73.1 percent), or 89.7 percent of the annual planned target. The dynamics of exports in 2011 have been largely due to high prices in the commodities markets. For instance, consumption of ferroalloys last year was 1.8 times higher than in 2010. The main export destinations were India, China,
Japan, Germany and Australia. Exports of copper wire have increased 1.38 times, raw zinc 1.3 times and raw lead 1.9 times.

To support the development of the mining and smelting industries, in 2010 the government approved the Mining-Smelting Industry Development Program for 2010-14. The program is aimed at rational and optimal use and development of mineral resources for the purposes of production of high-technology and science-intensive finished products. The government expects 107 percent growth of gross value added for metallurgy products.

Currently, the Industrialization Map of Kazakhstan includes 61 mining and smelting industry projects, with an investment of KZT 1.5 trillion ($10.0 billion). In 2011, 11 projects brought the economy a new worth of KZT 52.7 billion ($351.9 million) and 2,700 new jobs. The implementation of these projects contributed to the production of base metals, development of low-tonnage production, growth in production of high-technology products and expansion of exports to foreign markets. New jobs have improved the situation on the labor market.

The government has initiated significant measures to support the expansion and optimization plans of
the country’s largest mining and smelting companies. Comprehensive modernization plans have been introduced for six strategic enterprises (Aluminium of Kazakhstan, SSGPO, TNK Kazchrome, “Kazakhmys”, Sat & Company and Kazphosphate). It is expected that, as a result of joint cooperation, a volume of investments into industry by 2015 will amount to KZT 1.72 trillion ($11.5 billion), which will create more than 3,000 additional jobs.

The government also carried out systematic measures to support small and medium-sized businesses represented in the industry. In 2011, within the framework of the Road Map for Business – 2020, the state approved 782 applications for loans worth KZT 238.5 billion ($1.6 billion), including loans to 101 mining and smelting projects amounting to KZT 52.6 billion ($351.2 million).