Overview
| Overview | 2007 | 2008 | 2009(estimated) |
|---|---|---|---|
| Total Market Size | 915 | 968 | 933 |
| Total Local Production | 88 | 92 | 70 |
| Total Exports | 5 | 6 | 3 |
| Total Imports | 832 | 880 | 860 |
| Imports from the U.S. | 70 | 76 | 76 |
In USD Million; Note: the above statistics are onofficial estimate based on Kazakhstan customs data and industry sources.
Kazakhstan is endowed with a wide range of mineral resources -- including coal and ferrous and non-ferrous metals. Because of this mineral wealth, it has a large mining sector and over 230 separate enterprises produce or process coal, iron and steel, copper, lead, zinc, manganese, gold, aluminum, titanium sponge, uranium, barites and many others. The sector is responsible for over 30% of export earnings, over 16% of GDP, and 19% of industrial employment.
Kazakhstan produced 94 million tons of coal in 2008, ranking it 9th in the world in terms of production. The country is the 8th largest in iron ore reserves with 12.5 billion tons. The nation ranks second, globally, in manganese ore reserves, which are estimated at 600 million tons. Kazakhstan boasts 30% of the worldwide chromite ore deposits. The country is also a significant producer of beryllium, tantalum, barite, cadmium and uranium among the CIS. Kazakhstan is paying particular attention to developing its gold mining (ranked 10th globally) and uranium mining (25% of world reserves) as commodity prices rise, and will need to attract foreign investment in order to expand current production. Overall, the Kazakhstan mining industry is forecast to grow on average 9.2% over 2008-2011, with the industry value reaching $4.8 billion in 2011.
Much of the technology and management practices of this industry date from the Soviet times, which has hampered foreign sales. Exports of mining equipment to Kazakhstan have been limited by a lack of investment in this sector. In the mid-1990's, many foreign investors entered the country and started exploration and development activities, but, with few exceptions, they have ceased their operations. The investors claimed that lack of transparency, poor financial incentives, unclear and arbitrary laws which favor local investors, bureaucracy, and unclear land tenure made it impossible to continue their operations. The government in turn, claims that many investors failed to deliver on promised commitments. As a result, under the current system, few foreign companies are willing to risk investment, with or without a local partner.
Best Products and Services
Taking into consideration the price increase for non- ferrous metals, gold, uranium and growing demand for coal, Kazakhstan’s mining industry is developing rapidly. Currently Kazakhstan is an attractive market for U.S. mining equipment/machinery suppliers. American companies can provide needed products and services to the Kazakhstani mining companies, such as bulldozers, drilling equipment, explosives, trucks, drill rigs, trams, cranes, crushing and pulverizing machinery, dredges, hydraulic excavators, quarrying machinery and equipment, elevators, compressors, hammer mills, special trucks, etc. Among the best sales prospects and services are diamond drilling contractors and people that perform geological, geochemical and geophysical surveying, equipment involved in bulk sampling such as a processing plant, small aircraft, fuel supplies and geological supplies like sample bags. American companies that can provide goods and services that address erosion, formation of sinkholes, loss of biodiversity, and contamination of groundwater and surface water by chemicals from the mining process and products, which may minimize the harm towards the environment, will also have great demand in Kazakhstan. Explosives also present interesting export opportunities in the region.
Opportunities
More than half of Kazakhstan’s mining, processing, and smelting enterprises use outdated equipment that is often in need of repair. Almost all lack environmentally friendly technologies. Kazakhstan does not have its own mining machinery industry and relies heavily on Russian imports. U.S. mining equipment firms should explore trade opportunities in used and refurbished equipment, as well as turnkey project management. Kazakhstan mining machinery demand will grow 9% yearly through 2009. Gains will be driven by an upswing in prices for copper, silver and gold and by strong demand for coal. U.S. mining equipment and services suppliers should target major players in the mining sector, such as Kazakhmys, Eurasian Natural Resources (ENRC), TNK Kazchrome, KazakhGold Group, ShalkiyaZinc, KazAtomProm and others.