Thursday, April 19, 2012 -
Kazakhstan can establish dominance in the mining sector if it implements the necessary reforms to attract foreign mining firms, consultants gathering at a mining conference in the Kazakh capital Astana said on Thursday.
“Exploration is a thriving business around the world, but it is not thriving in this region,” the Reuters news agency reported SRK Consulting General Director David Pearce as saying.
“Companies need to have the confidence that, if they do the exploration, they can develop the mine and achieve the economic reward.”
Kazakhstan is mineral-rich and has been extensively mapped by exploration specialists. But the Central Asian state attracts less than 1 percent of total global investment in minerals mining.
One reason for this delay in mining sector development is the problem inherent in offering tenders, Rio Tinto’s general manager for Central Asian exploration, Chris Welton, told the third annual MINEX conference.
“A lack of transparency in the tender process means that foreign investors do not feel confident they can get a fair hearing,” Welton said.
“The decision on awarding tenders is driven solely on the signing bonus and the social contribution, with no consideration of the technical competence of the winner or the winner’s ability to develop that project.”
He also added: “Investors are reticent to present their ideas as the chance of them winning the subsequent tender are slim.”
Kazakh First Deputy Prime Minister Serik Akhmetov said the government is working to improve these processes.
“It’s important to create the optimum conditions for attracting investment, technology and opening up new mineral deposits that can help replenish depleting reserves and create the economic stimulus for development,” he said.
On Wednesday, Vice Minister of Industry and Trade Nurlan Sauranbayev said the government would invest $400 million per year in search of new mineral reserves.