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 KAZAKHSTAN International Business Magazine №3, 2012
 Mining and metallurgical complex: problems, solutions, prospects

Mining and metallurgical complex: problems, solutions, prospects

Prior to the III International Mining and Metallurgy Congress – Astana Mining & Metallurgy, we asked the executives of several leading companies that supported the AMM'2012 event, to answer the questions of our traditional quiz.
  1. What is your assessment of the current situation in the mining complex of Kazakhstan?
  1. What steps should be taken in order to give a new incentive to the development of your industry?
  1. What contribution can make your company to this process?
Mr. Felix Vulis, Chief Executive Officer, ENRC PLC

1. We highly value the situation and prospects of the mining complex in Kazakhstan. In this regard, it should be noted the successful implementation of the balanced governmental policy. The strategic course of the President allowed implementing a number of important programs, aimed at accelerating the mining complex development. The Government has developed the Program of Forced Industrial-Innovative Development for 2010–2014 and the Industrial Program for Mining Complex is an integral part thereof. A reward scheme for the companies, initiating the second, third and fourth stages of processing in Kazakhstan is to be implemented within the framework of the Program. Large enterprises that previously exported raw materials are involved now into an active investment policy. The modernization of production and introduction of the advanced technologies allow running the new process stages. ENRC projects are the bright example of these trends.

2. The industry needs a technological upgrade based on the triad “people – processes – technology”. It is necessary to continue encouraging the companies to expand their investment activities, modernization of production, implementation of advanced technologies and manufacturing of the high value added products. In addition to the technological upgrade, it is necessary to invest into human resources and to establish a system of personnel training on new production technologies management.

3. During its operations, ENRC makes a feasible contribution to the development of the national mining complex. Our company always considers the development of its assets in Kazakhstan as major ones; therefore, we continuously invest in their expansion and maintenance. Since the moment of its foundation, ENRC invested more than $6 billion only in the development and modernization of production facilities and the total value of major projects of the Group’s capital expenditures program compounds to $10.9 billion. At present time ENRC implements such major projects as the construction of a new ferroalloy plant of the TNC Kazchrome, an anodic plant at Kazakhstan Aluminium Smelter (KAS), processing plant and a plant for the production of hot briquetted iron in the JSC Sokolov-Sarbay Mining Production Association. The company has completed the reconstruction of power generating unit No. 2 and now conducts the reconstruction of the unit No. 6 at the KAS.

Moreover, ENRC is well-known in Kazakhstan as a socially-oriented and responsible company, working for the benefit of its employees and society. We invest in infrastructure development and implementation of long-term programs of health care service, education, culture and sport. For example, in 2010 the company allocated about $58 million for the external social projects in Kazakhstan and in 2011 the amount of investment, allocated for these purposes, achieved an impressive $160 million.

Mr. Vijay Mahadevan, General manager, JSC ArselorMittalTemirtau

1. Our company is constantly thinking about the future and we see the future in implementation of our investment projects aimed at the improving occupational safety and environmental friendliness of production, growth of our competitiveness in the world markets and the increase of the output of products with high added value. This will have positive impact not only on the positions of the company, but also the prosperity of our employees and population of the region.

2. We have set ourselves the task to develop and expand production of domestic iron ore and coal resources in order to increase production volume and improve its quality. To implement these objectives, we need government assistance in the matter of issuing quota to attract skilled foreign manpower. This will facilitate knowledge transfer to local employees, as well as timely implementation of investment projects. Also, the State shall take measures to develop the domestic metal products market – we want to sell more metal in the market of Kazakhstan. For our part, we support the development of local small and medium-sized enterprises to buy more goods and services in Kazakhstan’s market.

3. We carried out a reconstruction of blast furnace No. 2, which is the most modern furnace at our plant for the moment. We have also successfully completed a project on construction of continuous -casting machine MNLZ-3. This new machine for continuous casting of square bloom will provide full load of our section-rolling shop, whose products are in demand in Kazakhstan. Currently underway is the construction of the gas cleaning unit in the converter plant and hose filter in sinter machines. In our future plans – the construction of new lines of galvanizing and polymer coating, as well as the modernization of the remaining blast furnaces hot-rolled mill. These projects will bring the company to a higher technological level of production, and will improve our performance in regard to ecological compatibility, productivity and occupational safety.

Mr. Olzhas Tokhtarov, Chairman of Board, SAT & Company

1. As the head of mining and metallurgical company, of course, I trace the development of the mining complex of Kazakhstan, and I would like to note that currently the metallurgy accounts for more than 35% of the processing industry, and the share of the complex in the country's gross domestic product is 47.4%. Thus, the mining complex – is the most important sector of the national economy, which plays an important role in the implementation of the State Program of Forced Industrial-Innovative Development. The maximum domestic processing of raw materials, the launch of base metals, production of high added value products with the participation of the private sector – that is what is necessary for the development of our industry.

Now development of a national innovation system acquires a certain definiteness and specific nature. The concept of planning industrial-innovative development of economy based on the rational distribution of production and infrastructure capacities has a particular relevance. Of course, all this allow to increase the efficiency of state investment policy, conduct balancing of the objectives and available resources, to develop the fundamentals for infrastructure development and forecasting of socio-economic indicators.

In the mining complex actively pursued modernization and technical renewal of production, introduction of modern technology, energy and resource conservation, provision of technical and environmental safety, reduce losses and rational use of mineral resources, which allows to proceed to the next process stages. There are created new and developed existing productions with high added value, solved the problems of local content.

Along with this, of course, there are also weaknesses. The development of science and the introduction of high-end technologies are still slow, and the diversification of the economy still has not become a national idea of the country and the real priority for all government authorities.

2. First of all, it is necessary that the further work of the mining complex would be carried out not only in terms of current yield, but also on the basis of the strategic interests of the state, private business and society.

In these circumstances, we shall focus our mutual efforts at the following areas:

· urgency of further development and qualitative improvement of the mineral resource base through the identification and exploration of new high performance ore deposits;

relevant ministries shall establish accounting and develop the provisions for the strategic types of raw materials;

· we need a strategy for comprehensive utilization of mineral resources, with emphasis on the efficient processing and obtaining a wide range of products competitive in the world market;

· we should restore productive facilities of previously existed enterprises manufacturing by-products from off gases and solid wastes;

· it is necessary to intensify the involvement of research institutions, to encourage the expansion of knowledge-intensive and export-oriented production;

· enterprises should be developed based on the increase in volume of Research and development aimed at a deep extraction of associated metals using high technology and modern equipment;

· in order to enhance the competitiveness of domestic metals products in foreign markets it is necessary to develop the optimal scheme of its transportation and sale, as well as to adopt a number of regulatory and financial measures such as reducing tariffs on services of natural monopolies, the abolition or reduction of customs duties on certain goods, making long-term intergovernmental agreements on specific types of products, crediting of export transactions, state motivation to improve the quality of products with the acceleration of the transition to international standards.

3. SAT & Company is a modern, vertically integrated holding company that manages a number of major projects in the mining and metallurgical industries of Kazakhstan and abroad.

To expand the resource base we carry out active exploration and mining on several manganese as well as coal and nickel-cobalt deposits. Our company develops new fields, create infrastructure and jobs, invests in innovative technologies. In particular, studies of new methods of smelting of lateritic nickel ore deposit of Gornostaevskoe field which will allow to create the first production of nickel in Kazakhstan.

Our pride is Taraz Metallurgical Plant, which was included in the list of breakthrough projects as well as in the program “30 corporate leader”. It has the ability to expand its capacity to 300 thousand tons of ferromanganese silicon per year adding to the production line ferrochrome, ferromanganese and ferrosilicon.

Today the products, manufactured by SAT & Company, include the ferroalloys, calcium carbide, anode paste and repair paste, coal, manganese and chrome concentrate, limestone and others, highly demanded in Kazakhstan and abroad.

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· 2014 №1  №2  №3  №4  №5  №6
· 2013 №1  №2  №3  №4  №5  №6
· 2012 №1  №2  №3  №4  №5  №6
· 2011 №1  №2  №3  №4  №5  №6
· 2010 №1  №2  №3  №4  №5/6
· 2009 №1  №2  №3  №4  №5  №6
· 2008 №1  №2  №3  №4  №5/6
· 2007 №1  №2  №3  №4
· 2006 №1  №2  №3  №4
· 2005 №1  №2  №3  №4
· 2004 №1  №2  №3  №4
· 2003 №1  №2  №3  №4
· 2002 №1  №2  №3  №4
· 2001 №1/2  №3/4  №5/6
· 2000 №1  №2  №3

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