Traveling around Central Asia there seems to be a ‘build it and they’ll come’ attitude to attracting mining investment. There is an expectation that subsoil auctions will be oversubscribed and disappointment when few western companies bid for assets.
In a few weeks’ time I will be making my 13th visit to Kazakhstan In four years. When I began looking at the country 4 1/2 years ago this was the attitude in Kazakhstan. With undoubtedly rich geology and an active minerals sector, the country was hard to navigate and get into. Rio Tinto had been there for years looking at exploration opportunities with little progress and the tales of explorers having to sell their projects to local developers discouraged Western interest. It seemed that Central Asia Metals Kounrad copper waste project was the only international success.
Kazakhstan has come along way in a short time. The implementation of a new Australian style mining and tax code has been a catalyst for overseas interest. CRIRSCO and EITI memberships send a strong message to investors that Kazakhstan wants to operate transparently and attract Western companies. Alongside this the mining arm of the Samruk Kazyna sovereign wealth fund, Tau Ken Samruk, has paid to make key projects investor ready, resulting in Turkish mining company Yildirim developing a gold project.
New environmental laws and the creation of the Ministry of Ecology Geology and Natural Resources acknowledges that environmental and social concerns are important to international investors.
All this activity is paying off as local and international juniors are starting to explore for new deposits and investors are beginning to look closely at the market. You can meet some of them at the MineInvest Challenge during MINEX Kazakhstan in Nur-Sultan on 31st March.
A roadshow of Kazakhstan mining, led by the ministry and TKS, will visit British Expertise in London and the PDAC in Toronto in February and March. Further activity to reiterate the message that Kazakhstan wants to work with overseas investors.
At the PDAC in Canada, the traditional home of exploration capital, the visitors will realise that investors are fickle and have been moving away from mining into alternatives such as cannabis and block chain. At the same time, institutional investors are becoming nervous about investing in a potentially reputationally damaging industry post the Brazilian tailings failure that killed 270 people in Brumadinho a year ago.
Central Asia competes for mining investment against countries such as Australia, Canada and the US which are closer to home and more easily understood by Western financiers. There are several prerequisites that these investors look for when considering where to put their dollars. Transparency and stability are as important as the economic viability of a mining project. Demonstration of these attributes may require a cultural change in the Central Asian mindset where geological data is viewed as a State secret.
Availability of geological data, online cadastre and licensing e-portals, as well as the adoption of international resource reporting standards, western bankable feasibility studies and the application of the IFC Equator principles standards in environmental and social impact assessment are all requirements to attract Western investment.
The mining industry as a whole has a task to do in reminding people that the necessities of modern life are made from materials extracted from the ground, and showing that mining can be done in a harm-free and equitable manner, particularly in the post- Thunberg world we live in. Central Asia has an even larger job of convincing people that the highest standards of practice are followed.
This is a job that Kazakhstan has taken on and making significant progress in. Uzbekistan is keen to follow the same path, with a new mining code due for implementation in 2020 and modernization of State copper company Almalyk. MINEX are planning the 2nd Uzbekistan Mining Forum in Tashkent in June if you want tolearn more.
Other countries in the region are also anxious not to be left behind with Tajikistan planning a London Investment Forum on St George’s Day 23rd of April and a MINEX Forum in Dushanbe in May.
Why not take a visit to Kazakhstan to find out more about what’s going on and meet Junior exploration companies active in the region at MINEX Kazakhstan on the 31st of March in Nur-Sultan. Judge for yourself if Central Asia is the next frontier for mining in the 2020s.
Author: Ros Lund
Ros Lund has led mining scoping visits and trade missions across Eurasia.
Ros has visited mining projects in the Balkans, Poland, Kazakhstan, Mongolia, Ukaine and Uzbekistan.
Ros directed more than 50 conferences, seminars and events in the UK and Africa.
Ros is a certified Six Sigma Black Belt and Corporate Coach and holds a degree in Social Ethics from Lancaster University.