Kazakhstan lifts mineral licence ban, invites investors

Apr 18. Reuters

By Raushan Nurshayeva

Kazakhstan lifts mineral licence ban, invites investorsKazakhstan on Thursday lifted a moratorium on issuing new mineral exploration licences to develop new deposits in the non-oil sector and invited investors to submit bids for rights to develop its vast mineral riches.

Kazakhstan, a resource-rich Central Asian nation five times the size of France, imposed a four-year moratorium on issuing new licences for subsoil use in 2008 as it was adopting a new tax code, saying it needed “to put this sector in order.”

Kazakh President Nursultan Nazarbayev, who has ruled the country of 17 million with a firm hand for more than two decades, has urged the government to lift the ban on new licences after the moratorium expired last year.

The landlocked country holds uranium reserves second only to Australia’s. It also has the world’s largest chromium reserves and substantial copper, iron ore and zinc deposits.

But less than 15 percent of Kazakhstan’s explored metals reserves are in production, official data show, and despite its prospects Kazakhstan receives about 1 percent of global investment in metals exploration.

“The Industry and New Technologies Ministry officially announces the beginning of accepting bids from potential investors in an open tender for rights for subsoil use at a number of licence areas,” the ministry said in a statement.

It did not name these areas or the timing for the auction.

Kazakhstan, the second-largest post-Soviet oil producer after Russia, has attracted around $170 billion in foreign direct investment since the early 1990s. Hydrocarbons have accounted for the bulk of this volume.

The moratorium concerned subsoil licences for all new mineral deposits, including oil and gas ones.

Yet the authorities stress that now they would like to see vast investment flowing primarily into exploration and development of metals.

“Up to now, the focus has been on hydrocarbons, oil and gas, which are the locomotive of our economy,” Bazarbai Nurabayev, head of the industry ministry’s geology and subsoil use department, told a mining conference earlier on Thursday.

“This is where investors would mainly go, putting large funds into exploration works, discovering new reserves and new deposits. Now the state is taking measures to spur the development of the mining sector.”

Nurabayev said the government planned to free those investing in geological exploration from value added taxes.

Nazarbayev said in January massive foreign investment was sorely needed in his country where an average of $20 was spent on geological exploration per square kilometre, compared with $45 in neighbouring China, $167 in Australia and $203 in Canada.