Kazakh Kazatomprom To Sell Stake In One Of Its Assets

Kazakh Kazatomprom To Sell Stake In One Of Its Assets

National Atomic Company Kazatomprom announces the sale of 51% stake in the authorized capital of LLP JV KT rare metal company. Electronic auction starts December 21, 2016, reports KazWorld.info with reference to the business information center Kapital.kz.

Electronic auction on lowering the price starts December 21, 2016 at 11:00 Astana time on the web portal of the State Property Register. The starting price, asking for a 51% stake in the authorized capital of the enterprise – more than 98.6 million tenge.

Faced with the increase in world demand, in 2012 Kazakhstan officially announced its intention to increase its production of rare earth ore to 1,500 tons per year, and to more than double its production of beryllium by 2014. Its resources are located, among other places, on the Kundybay site close to Kustanay in the north of the country, which contains yttrium – a rare earth element. The Soviet infrastructure, which might have contributed to the extraction of rare earths, is today closed or obsolete, but as the world’s largest uranium producer, the country has the technical capacity to extract them from its uranium ore at a reasonable cost. The authorities have nonetheless largely looked to foreign investors. At present three-quarters of Kazakh ores are exported to Russia and 20 percent to China. Other international players are therefore trying to act quickly in order to prevent more of Kazakhstan’s reserves from going to Beijing. The main interested parties are Germany and Japan.

In April 2011, Kazakhstan’s state-owned nuclear company Kazatomprom announced it would invest US$800 million to develop rare-earth metal mining through partnerships with Rosatom, Toshiba, and Sumitomo. Toshiba and Kazatomprom announced the creation of KT Rare Metal Company, 51% being owned by Kazatomprom, 49% by Toshiba. In April 2012, Sumitomo, the third largest Japanese commercial company, Japan Oil, Gas and Metals National Corporation, and Kazatomprom signed a new agreement for the exploitation of rare earths and a technology transfer to Kazakhstan. Within this purview, Kazatomprom and Sumitomo created the Summit Atom Rare Earth Company (SARECO), based in Ust-Kamenogorsk 51% of which is owned by Kazatomprom and 49% by Sumitomo. Sareco has built a $30m factory in Stepnogorsk, near the Kazakhstani capital Astana. The plant will produce 1,500 tons of rare earth oxides a year, with plans to increase output to 3,000 tons by 2015. By 2017, capacity is expected to be boosted to 5,000 or 6,000 tons a year. Almost all will be Japan-bound. According to Kazatomprom, the Stepnogorsk plant would mainly produce heavy rare earth elements such as dysprosium.

The Federation of German Industries (BDI) also hopes to gain access to Kazakh rare earths in order to secure its supply and limit its dependency on China. In February 2012, Angela Merkel and Nursultan Nazarbayev agreed a strategic partnership worth a total of €3 billion, which guarantees German companies the right to explore and exploit Kazakh rare earths and other raw materials in exchange for technological investments. France and Kazakhstan have also increased their cooperation in this domain. During Nazarbayev’s visit to Paris in September 2011, the Bureau of Geological and Mining Research (BRGM) concluded a strategic partnership agreement with Kazatomprom for the purpose of identifying production opportunities and creating a Franco-Kazakh laboratory for rare earths to develop new extraction technologies.