Mining and Metallurgy of Kazakhstan in 1997-2000
In the mid 1990s, a tendency toward economic growth was seen in Kazakhstan. In 2000 the GDP increased to $18.3bn from $16.9bn in 1999. The share of mining and metallurgy in the GDP rose from 5% in 1997 to 9.8% in 2000. The number of mining and smelting enterprises also grew (from 585 to 644). This, however, had little impact on the growth of employment in the mining and metallurgical sector, this being only 700 people. The rate of growth was more intensive in mining and metallurgy than in the economy as a whole. In 2000 production of several types of raw materials was multiplied as compared with 1999. Production of iron ore pellets grew by 2,4 times, iron ores by 1,6 times, and chrome ores by 1.1 times. Production of other raw materials also tends to grow. In 2000, ferrous metallurgy was the most rapidly developing sector: production growth ranged from 50% to 200% (as compared with 1999). Development of non-ferrous metallurgy was slower: between 10% and 50%, depending on products. On the whole, gross production in mining and metallurgy increased 49%.
Foreign direct investments in mining and metallurgy decreased from $929.9m in 1997 to $109.6m in 2000. In 1997, mining and metallurgy accounted for 44.1% of the overall FDI in the country, while in 2000 the share shrank to 4%. This tendency is especially evident in mining and non-ferrous metallurgy.
Gross investments, however, increased in 2000 (over the figure of 1999) thanks to an increase in investments in iron and manganese by $45.3m, complex ores $39.1m, uranium $29.9m, gold $16.9m and chromites $13.4m. However, 98% of gross investments was made in development of minerals. Gross investments in complex ores and copper were made by non-residents of Kazakhstan. On the whole, foreign investors accounted for 60.6% of gross investments in mining and metallurgy in 2000, and 81% of gross investments in the mineral and raw material sector (including fuel and energy).
The government of the country is greatly concerned about a decline in investments in geological prospecting which fell from $41.8m in 1997 to $14m in 2000. This is a threatening tendency, since minerals reserves have not been replenished for the last five years in Kazakhstan.
Exports of mining and metallurgical products increased 30% in 2000. This, however, took place against the background of a 31.6% rise in manufacturers’ prices. Export of silver rose 8-fold in physical terms, refined copper 1.1-fold, unrefined lead 1.4-fold, and ferrous products 1.4-fold. Exports of ores and iron ore concentrates grew by 1.5 times, zinc concentrates by 1.8 times and ferrochrome by 1.2 times.
Export to the CIS countries. In 2000, supplies of iron ores to Russia increased by $19m, flat-rolled metal by $60m, alumina and hydroxide by $44m. At the same time, exports of zinc ores and concentrates to Russia reduced by $3.5m, manganese ores and concentrates by $2.6m, and asbestos by $746m. Export of flat-rolled metal to Ukraine rose by $7.1m, while supplies of chrome ores and concentrates reduced by $0.4m. Delivery of zinc ores and concentrates to Uzbekistan also grew by $19m. Byelorussia ceased importing ferroalloys from Kazakhstan.
Exports to the European Union. In 2000 exports of refined copper to Italy increased by $18m and silver $8.7m, while exports of unrefined zinc decreased by $18m. Supply of refined copper and copper alloys to Germany rose by $73.8m, silver $23.3m and gold $13.5m. Kazakhstan’s exports to the Netherlands decreased: ferroalloys by $93.8m, silver $34m and titanium $10.3m. Exports of silver to Great Britain grew by $36.1m, flat-rolled metal $7.8m and unrefined lead 5.3m. Meanwhile, exports of titanium dropped by $8.2m.
Exports to other countries. In 2000 exports of flat-rolled metal to Iran increased by $96.6m, whereas exports of asbestos reduced by $1m. Turkey increased imports of flat-rolled and nickel-clad steel by $11.7m, unrefined zinc $3.6m and unrefined lead $2.7m. Exports of unrefined aluminium to China increased by $48.7m, flat-rolled metal $27.6m, refined copper $24.4m, ferrous metal waste and scrap $26.2m, and non-ferrous metals $17m, whilst exports of iron ores and concentrates decreased by $6m.
In 2000, there were little fluctuations in international prices for raw materials, which did not affect production in Kazakhstan. Domestic prices for exported commodities from Kazakhstan approached the level of international prices, however, with some deviations.
Taxes and Payments to the Budget
In 2000, the mining and metallurgical sector brought 31% more in taxes and payments to the budget. Most taxes were paid by companies producing non-ferrous metals (73%), ferrous metals (16.3%) and gold (3.8%). Other companies paid a smaller part of all taxes and payments to the budget.
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