Azernews.Az

By Aynur Jafarova

Kazakhstan will consider amendments to the law on subsoil use in April, a measure that Deputy Minister of Industry and New Technologies Nurlan Sauranbayev believes should facilitate the activity of subsoil users.

Sauranbayev said the need for amendments to the current law was due to the fact that the initial version of the document was drafted with little emphasis on the oil and gas industry.

"Naturally, our oil industry is the engine of the economy," Sauranbayev said. "There was such a situation that it was necessary to go through the same procedure as to obtain a contract for the oil field development to get a contract for gravel and sand. The existing provisions of the law are correct for the oil industry, but they are unsuitable for solid minerals."

Sauranbayev added that after lifting the ban on solid minerals the first tenders on issuing licenses for subsoil use will take place late this year.

"The presidential moratorium was abolished in the beginning of this year, and according to the order of holding the contests, issuing licenses on development of solid mineral fields even at accelerated rates will take place only after 8-9 months, at the end of the year," Sauranbayev said.

He clarified that the ministry's experts should select the investment-attractive fields and collect all the needed geological information -- which requires quite a lot of time.

"Whereas previously, mineral deposits were mainly traditionally exploited in East Kazakhstan and Karagandy provinces, now we are talking about developing fields in North Kazakhstan, Kostanay and Almaty provinces," Sauranbayev noted.

According to him, the exploration of gold, coal and rare-earth metals remains the most attractive for investors.

Kazakhstan holds the second large uranium reserves in the world as well as the world's largest chromium reserves and substantial copper, iron ore and zinc deposits.

According to official data, less than 15 percent of Kazakhstan's explored metals reserves are currently in production; only 75 of 282 identified gold deposits and 19 of 55 iron ore deposits are in operation. Kazakhstan receives less than 1 percent of global investment in metals exploration.

The main aim of the amendments is to create a balance in the use of subsoil fields, increase the investment attractiveness of the country's geology sector and facilitate the activity of subsoil users.

In November 2012, Kazakh President Nursultan Nazarbayev instructed the northern regions' representatives to intensify the efforts on attracting investors in the mineral resource sector and stressed the necessity of the government's taking certain measures to raise the regions' interest in attracting investment and lift the moratorium on some types of mineral resources.

The moratorium on the issuance of licenses for subsoil use was introduced in 2008 in connection with the development of new tax legislation under which this form of contracts was abolished, as a production of sharing agreement, which effectively meant that the contracts concluded were no longer stable.

The New Tax Code entered into force on January 1, 2009.