MINEX Central Asia raises hopes for reform

Last month’s high-profile airing of the proposed new Kazakhstan mining code at the MINEX Central Asia event in Astana has raised hopes for increased foreign investment in the country’s minerals sector, though a source close to the drafting action says “nobody can tell” if the proposed January 2017 enactment of a new mining law will actually happen.

Timur Toktabayev, director of Kazakhstan’s Subsoil Use department of the Ministry for Investment and Development, led the public discussions in Astana and is overseeing the law-drafting process. He was joined at the event by key legal, financial and mining industry advisors who are also involved in the code rewrite.

All comments on the public draft are expected to be submitted via Toktabayev to parliament by the start of Kazakhstan’s autumn.

A key observer of the process told Mining Journal: “Currently the draft is a mixture of old soviet mentality – with undefined regulating bodies and certain limitations on strategic deposits – and a good mining code, with first-come-first served concept for licensing, [and the] state not approving any commercial or technical issues in mining projects unless they affect environmental conditions and/or safety.”

Another directly involved with advising exploration and mining companies active in the region said: “Kazakhstan’s mining industry is undergoing an unprecedented change – from a Soviet regulation style to a modern mining code – and it’s not smooth.

“Subsoil use is a sensitive political issue and often brings up resource nationalism discussions. Should Kazakhstan implement only 50% of what is in the [new mining code] concept then it will elevate the country to one of the most attractive mining locations globally.

“This is due to a combination of being underexplored with huge mineral endowment and potential – as indicated by Soviet works, good infrastructure, a qualified workforce, business-friendly tax regime, in general, and political stability.

“Of course some problems will also remain but I think they will be significantly outweighed by the positive changes” according to Mining Journal.