Karaganda Region Governor Nurmukhambet ABDIBEKOV:
STARTING NEXT YEAR OUR REGION WILL SEE A SERIES OF MINERAL PROCESSING PROJECTS USING STATE-OF-THE-ART TECHNOLOGY
Nurmukhambet ABDIBEKOV, the governor of the Karaganda Region, told Interfax-Kazakhstan in an interview about the prospects of the economic development of the region, performance and plans of the largest companies in the region Arcelor Mittal and Kazakhmys, the rehabilitation of non-operating enterprises and the reuse of mineral wastes.
- Mr Abdibekov, in 2013 investment in the Karaganda Region increased by 18.2% to amount to 403.4 billion tenge. What is the investment expectation this year?
- We expect the fixed capital investment to come to $363 billion tenge this year. Unfortunately, this is 10.4% below the last year's level. The decrease is mainly due to completion of the projects for construction of the Kazakhstan-China pipeline, the Zhezkazgan-Beineu railway and the upgrading of Furnace No.3 at Arcelor Mittal Temirtau smelter. Industrial investment accounts for over 50% of the total fixed capital investment.
- The Karaganda Region planned to launch 13 new production facilities in 2014, their value totaling 77 billion tenge. Has the target been met? What are the plans for next year?
- Indeed, we planned to launch 13 new projects this year under the Industrialization Map. However, after the Map had been revised and the selection criteria tightened, their number was reduced to ten, with an overall value of $44 billion tenge. These projects will create 1,194 working places.
In the first half of the year, we brought to life four projects worth 18.960 billion tenge, creating 435 working places. Two of these projects were implemented in the special economic zone Sary-Arka together with German partners.
By the end of this year, we expect the other six projects worth 25.1 billion tenge to be brought into operation, creating 759 working places. One of these projects is aimed to upgrade and expand the smelter and mining enterprise Pustynnoye, which is owned by JSC AK Altynalmas and located in the Aktogai District. The cost of this project is 21.512 billion tenge and it will create 524 working places.
As a result of this project, Pustynnoye will have a full production cycle - from gold-bearing ore extraction to Dore smelting. The new production methods will be much safer for the environment.
In 2015 we will embark on mineral processing projects using state-of-the-art technology. Altai Polymetals LLP will build a mining complex in the Karkaralinsk District near the copper ore deposit Koktaszhal, with a production capacity of three million tonnes of ore a year. Karaganda Pharmaceutical Complex LLP will build the third stage of the pharmaceutical plant in Karaganda [the administrative center of the Karaganda Region], creating 150 working places. All drugs that will be produced at the plant will be in compliance with GMP standards. Once, the third line in operation, the production capacity of the whole plant will reach two million packs of drugs a year.
Eurasia Invest Ltd plans to construct a milk powder factory in the Osakarovka District, which will use mare milk as feedstock. This project, totaling 831 million tenge in value, will create 56 working places.
We are also considering a number of other industrial projects.
- The local authorities earlier said that the non-operating production facilities would be revived. What is the status?
- The rehabilitation of the non-operating enterprises is being implemented on a step-by-step basis, since we cannot re-launch all non-operating plants at the same time. This year for instance, two of such enterprises have been brought back into service: the silicon metal plant of Silicium Kazakhstan LLP and the former concentrating mill in Saran that has been turned to a barite concentrate plant, a business unit of Complete LTD.
- Are there any projects aimed to reuse the mining waste? As you know, this would help resolve the environmental problems in the region and get an additional source of feedstock.
- I quite agree with you here. It is very important that the mining waste could be reused. We are already moving in this direction. For instance, Sary Kazna has launched a facility that processes slag that is further used to produce cathode copper; and ICC has put into operation a complex that uses the wastes of the Balkhash Concentrating Mill to produce iron concentrate.
Kazakhmys and ArcelorMittal also have piles of mineral wastes that could be reused. The companies plan to process these wastes in the future.
A thermal insulation materials plant, which has been launched in Temirtau, uses mineral wastes from Arcelor Mittal Temirtau Smelter. There is also a sorting out facility for mineral wastes, owned by NPP Gamayun VRK, in the village of Zhairem.
- What are the business plans of Arcelor Mittal and Kazakhmys in the region?
- Arcelor Mittal Temirtau is taking measures to stabilize its production. As a result, their output in the nine months of the current year came to 275.1 billion tenge in value or 64.5 billion tenge higher that in the same period last year. In January-September 2014, the output of cast iron amounted to 2.3 million tonnes, steel to 2.6 million tonnes. In early November, the company complete construction of a gas treatment unit and will put into operation Basic Oxygen Converter No.2. In December, Arcelor Mittal Temirtau will return into operation Blast Furnace No.3 after upgrading, which will allow the company to increase the production capacity by 13% to make 6,300 tonnes a day. So, the smelter will have all four furnaces and three converters running starting from December this year. In 2015 the smelter will produce 3.5 million tonnes of cast iron and 3.7 million tonnes of steel. The company plans to implement an expansion project by 2019 to increase the steel production up to 69 million tonnes a year.
As far as Kazakhmys is concerned, Ore-Smelting Furnace No.2 at Zhezkazgan Copper Smelter was returned into operation on September 15. It is expected to produce 10,000 tonnes cathode copper by the end of this year. In the future, Zhezkazgan Copper Smelter will switch to a hydrometallurgical technology to process copper ore. The company plans to build a new complex to process the wastes of its concentrating mill. At the moment, there is a pile of 800 million tonnes of wastes. Kazakhmys will also build another mill for processing oxidized ores.
The two companies also contribute to SME development in the region. JSC Arcelor Mittal Temirtau created an SME support fund that has already provided 1.2018 billion tenge in cheap loans to finance SME projects. As part of its production localization programs, the company has created 15 new enterprises that have received 8.3 billion tenge worth of production orders from the smelter.
Kazakhmys has organized an Association of Entrepreneurs and Manufacturers of the Zhezkazgan and Balkhash regions in an effort to support the local SME. The Association is comprised of representatives from 98 local companies that employ a total of over 5,000 people. Kazakhmys guarantees to place production orders with the companies participating in the Association. To date, the company has concluded over 500 production contracts worth 9.5 billion tenge in total with the members of the Association.
Four years ago, Kazakhmys also launched an annual forum called "Manufactured in Kazakhstan" to develop cooperation with the local SME.
- Thank you for your time!
October, 2014
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