Director of Kazgeoinform, Geological Information Center, of
the Committee of Geology and Mineral Use, Saule URAZAYEVA:
"THE NEXT DECADE IS A DECADE OF NEW DISCOVERIES."
Kazakhstan is richly endowed with mineral resources, however, the experts believe that the Kazakh geological reserves are overestimated and the geological survey industry is stagnating. The dependence of Kazakhstan's economy on the exports of hydrocarbons and solid minerals presses for more urgent steps to revive Kazakhstan's geological survey efforts. The problems faced by the Kazakh geologists and ways to resolve them have been discussed with the head of Geological Information Center, Kazgeoinform, of the Committee of Geology and Mineral Use, Saule URAZAYEVA.
- Do you agree with Vice-Premier Asset Issekeshev, who at the recent "round table" on Kazakhstan's geological survey problems, said that "the problems of the industry are systemic?"
- Nature has generously endowed Kazakhstan with mineral resources: nonferrous and ferrous metals, oil and gas, uranium and others. Prospecting, exploration, identifying the location of minerals, assessing deposit features, mineral content and mineral components is what the geological survey is all about.
Two key factors determine if such sophisticated and high technology projects can be handled successfully: a highly qualified personnel and efficient technologies. Therefore, the State Geological Committee must primarily focus on these two basic aspects.
Systemic problems we are facing today raise a serious concern
over the future of Kazakhstan's geological survey industry, as a whole.
- Can you identify the root of the problems?
- The highly-professional personnel has been rapidly downsizing since the late '80s - early '90s, when the Kazakh geological survey industry hit the rock bottom. During that time Kazakhstan suffered a large brain drain to Russia, Germany, USA, Canada and Israel. The strong Soviet geological survey school allowed our colleagues to receive a warm welcome abroad. Meanwhile, Kazakhstan failed to train a new generation to take over the reins from "the elders," who left the country. Over the last 15 years no advanced training have been offered to the specialists in geology. The age range of geologists has two extremes: it is either the personnel of the retirement age, or young graduates fresh from Kazakh colleges. A huge shortage of professionals in all fields of geology: geophysics and geochemistry, let alone economists able to make estimates for exploration and mining projects, keeps back the development of the state geological survey.
The mining industry feels it more acutely. The oil and gas companies
have been tackling this problem quite successfully giving a chance to dozens
of specialists to advance their skills every year, employing young graduates
from the leading international universities and having the Bolashak winners
to choose from. The mining sector has no such luck. The employees of the Committee
of Geology and its departments are lagging behind their foreign colleges in
all aspects. The Committee is an authorized agency for geological survey set
up to outline the main directions and scale of geological exploration and approve
of mineral users' feasibility studies. Lacking its own qualified staff, the
committee fully relies on external expert opinions, which it can neither assess,
nor verify.
- How far are we lagging behind the world leading countries in introducing new technologies?
- The extensive exploration work conducted in the Soviet period led to the discovery of almost all major sub-surface deposits in Kazakhstan. The prospects of new discoveries lie with geological surveys at greater depths and more difficult conditions. Such challenging geological exploration requires new technologies matching more complex search criteria as well as more accurate and more economically efficient approaches.
These effective techniques have been successfully used overseas: in Australia, China, Brazil, South Africa and Canada.
Before carrying out the field work, the analysis of the available geological data and design work must be done. The newly acquired geological and geophysical data must be processed, interpreted, comprehensively analyzed, computer simulated, which can't be done without advanced analytical technologies and professional staff.
The state stimuli to develop the scientific and technical potential
of exploration companies is of great importance. Unfortunately, the Committee
of Geology has not provided any incentives, moreover, all these years the committee
has not been involved in preparing any technical specifications and design documentations
for exploration license biddings. All that work was loaded on the bid winner.
But this is an absolute nonsense! This approach suggests that the committee
of geology delegated all its authorities to service companies. With no specification
requirements to comply with, the companies prepared design documentation based
on the equipment available at the moment. Figuratively speaking, if a company
had a tractor, a rock drill and two spades that was all it included in the design
documentation. Since the geological committee has never set a bar for advance
technologies, the Kazakh mining sector lacks any companies employing efficient
technologies in prospecting and exploration.
- Successful geological research is impossible without a well-developed scientific network...
- We lack research institutes, geological engineering and exploration bureaus, training centers, all of which constitutes the geological survey industry.
Unfortunately, neither a single geology research institute has survived, nor a single world-class exploration company has been created. The Committee of Geology has only three subordinate agencies, which take no part in the analysis of geological data, doing nothing better, but collecting, storing and providing data to resource users. To address that problem, the government has approved of establishing the geological research institute on the premises of the state-owned company "Geological Information and Analysis of Mineral Resources" along with a core storage and a lab analytical department. The new institute will be working in a close cooperation with Satpaev's Institute of Geological Sciences, part of Parasat Holding. The scientific geological research to support the mining sector will be supervised by the Committee.
Geologists pin high hopes on Kazgeologiya, a new national company. However the Kazakh company is created from scratch, unlike its Russian counterpart, Rosgeologiya, that has taken 38 existing companies under its roof.
The top priority now is to absorb the world experience, to prepare
conditions for the transfer of technologies and organize advance professional
training for local geologists.
- How do you estimate the current mineral reserves of Kazakhstan?
- The mineral reserves, an economically mineable part of the measured and indicated mineral resources, is the basis for successful development of the extractive industries.
All these years, the government officials, in charge of the geological research and exploration, have been presenting a quite bright picture of the mineral resource sector, boasting that Kazakhstan ranked in the top ten countries having world's largest mineral reserves. In fact, our analysis revealed a serious problem, especially for non-ferrous metals that are high in global demand.
The overwhelming part of Kazakhstan's ore reserves is concentrated in a relatively small number of large deposits discovered in the Soviet period. For example, the main commercial copper reserves are concentrated in 10 deposits, lead in 4 zinc in 6, gold in 11, iron in 13, and manganese in 6, etc.
Until now only the old operating fields have been contributing to the mining output, but their reserves are declining steadily. From 1998 to the present time, the expansion of the industrial mineral reserves has been modest. A percentage ratio of gold reserves expansion to the total is 5%, copper reserves have not increased over 0.4%, lead reassures saw a slight growth of 0.3% and zinc was a little ahead with a 2.4% increase ratio. Investments in the exploration of the mentioned types of minerals for the same period stand at only $388.8 million in gold, $100.8 million in copper and $108.1 million in lead and zinc. Investing public funds in geological exploration that started in 2003 represents even meager sums.
Clearly, such meager funding impeded the development of the entire
industry and were not enough for mineral prospecting in advance.
- You said that only the old fields are being developed. Does it mean that we have enough mineral resources to last a long time?
- The fact is that a large part of the state listed mineral resources are economically non-viable for the time being, as their extraction requires expensive processing and enrichment technology. The picture we have today is distorted due to the lack of geological and economic analysis of such refractory ore deposits.
According to the international standards, all geological and economic aspects of extracting mineral resources are put together to assess the commercial reserves. Unfortunately, Kazakhstan doesn't pay a proper attention to those details. Development of such deposits will require huge investments in state of the art technologies, high-end equipment, extensive training programs. All that may eventually leave some projects in the red. In order to have a real picture of the commercial reserves, we plan to bring our standards in line with the international classification of reserves.
The insufficient reserves of nonferrous metals raise big concerns.
Kazakhstan has to start prospecting works and exploration to make new discoveries
and revaluate the reserves under development.
- What are the shortcomings of the legal and regulatory framework relating to geological exploration?
- The legislation provides no incentives for geological exploration. These are very high-risk projects, as nothing is certain unless boreholes are drilled, data acquired and reserves are proved. Large investments are needed at the exploration stage. It's up to the government to create incentives and stimuli to bring more investments into the geological exploration. The government should ensure favorable conditions for exploration, but it is under no obligation to fund all exploration stages.
Other countries fund national-scale research, while all the other exploration activities are undertaken at the expense of private investment companies. For instance, the so-called small-scale mining companies, which due to the modest scale of their operations can't afford investing much in mining, focus mainly on exploration in exchange for certain benefits. They, for instance, are allowed to recoup their exploration costs from reassigning their mineral development license.
Second issue of concern is tax breaks. According to the world practices, a mining company before the start of production is exempted from VAT and granted certain tax reliefs on the import of equipment and etc.
Third, access to geological data must be provided to investors
free of charge and in full. This will significantly increase the inflow of investors
in exploration; give new impetus to the development of geological science and
ultimately expand the geological reserves and the resource base of the extractive
industries.
- Vice Premier Asset Issekeshev has recently mentioned that reserve balances coming from the mining companies raise serious doubts. Why do you think it is happening?
- Kazakhstan's system of calculating the reserve balance fully relies on the data provided by mineral developers. At the end of each year, they file a report on the reserves dynamics signed by company's CEOs that we use to amend the state reserve balance. We have absolutely no mechanisms to verify this information. We must learn from international practices to introduce efficient tools for verification of miners' reserve reports.
- Kazakhstan's geologists are setting up an expert council. What areas it will oversee?
- Geologists used to say "If there are two geologists, there
are always three opinions." In order to properly formulate a scientific
research theme, or correctly identify the exploration objectives for each project,
it is helpful to share its ideas in professional circles. Many geologists noted
that the mineral resource development program for 2010-2014 had a very weak
scientific and technical validity, as such body of experts did not exist then
and many scientists, who could have contributed to it, were left out.
We have to fill the professional gap that has been formed in the industry. And
there's nothing better than working side by side with experienced professionals,
who literally left no stone unturned in Kazakhstan to obtain the geological
data.
- How well the Kazakh mineral resources have been surveyed and is there a room for new discoveries?
- The geological surveys in the Soviet era were very extensive and meticulous, though the methods used back then have become outdated. We have a huge potential to discover new deposits, but can't expect favorable geological conditions. We must realize that discovering a deposit takes from seven to ten years: to detect it, delineate, survey and prepare for production. So, I hope the next decade will be a decade of new discoveries.
- Thank you for this interview!
October, 2011
й 2011 Interfax-Kazakhstan news agency
Copying and use of these materials without reference to the source is prohibited
October, 2011
© 2024 Interfax-Kazakhstan news agency
Copying and use of these materials without reference to the source is prohibited
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