Azernews.Az

By Aynur Jafarova

Kazakhstan's Industry and New Technologies Ministry is conducting a thorough examination of all previously signed agreements on subsoil use to secure new commitments.

The news was announced by Deputy Prime Minister and Minister of Industry and New Technologies Asset Issekeshev on November 6.

Speaking at a briefing in Astana, the Minister said that agreements on many projects and programs were concluded 7-10 years ago and while completing the agreements they included the understated liabilities of investors.

Until the year-end the agreements will contain $27 billion of liabilities according to which the investors will be required to invest in the subsoil use of the country, the Minister said.

The Kazakh president has instructed the Ministry to bring order to the sphere of subsoil use and to give non-working fields to those who will actually engage in the development of subsoil.

"The Ministry is currently working hard on non-working fields and I think by late 2013 we will cancel at least 40 agreements on non-working fields," he said.

Foreign investment

Issekeshev also said that there has been a certain drop in foreign investments in Kazakhstan's economy in the last two years.

"In particular, investments in two large projects were completed in 2012. The first is Kashagan and the second one is the purchase of Telia Sonera (telecommunications assets). Therefore, there's been a decline in investments this year," he said.

However, the structure of direct investments has changed in the country, he said.

"In particular, an increase of investments in the processing industry is occurring in our country. This is because the President personally oversees this issue and has held negotiations with the leaders of the world powers," he said.

According to the analysis of leading companies, Kazakhstan ranks 19th in the world and 2nd among the developing countries after Russia in the filed of direct foreign investments.

"The government has a national plan for receiving investments. We have around 400 business initiatives in store, as there is a rivalry for investments. We have already implemented some 96 projects, and another 300 projects are expected to be implemented. In particular, Toyota and EuroChim have already begun constructing their plants in Kazakhstan's territory," he said.

According to Issekeshev, Kazakhstan intends to be the best investment hub in the region.

"It is important for us that investors come and to be able to enter the Russian, Chinese, Central Asian and Caucasus markets with their products from here [Kazakhstan]. This is the main idea of the 'State Program of Forced Industrial-Innovative Development-2: Export and Conquest of Neighboring Markets'," Issekeshev said.

Three industrial cities

He went on to note that over 350 wells have been drilled in three industrial cities in Kazakhstan.

"Kazgeologiya began the exploration work in the area of small towns, and more than 350 wells have already been drilled," he said.

The Minister also said the exploration was carried out on methane and other minerals.

Kazakhstan has built 27 single-industry cities which are currently in poor condition. They are home to more than one and a half million people, 16.8 per cent of the country's urban population.

Since early 2013, Kazakhstan has launched a state program aimed at reviving these cities. It covers the period up to 2020. About 10 billion tenges has been allocated from the state budget to its implementation.

Gold production

Deputy Prime Minister went on to say that Kazakhstan intends to produce 46 tons of gold in 2013.

"As of 2013, Kazakhstan will have produced 46 tons of gold, 26 tons of which will be bought by the National Bank, and the rest will be exported, because we do not have facilities that could process ore," he said.

Kazakhstan has adopted a state program for gold production.

"We have changed the rules," he said. "Accordingly, all the gold produced in the country will be sold to the Kazakh National Bank. A plant with a capacity of 25 tons which will allow us to process all the produced gold will be commissioned in Astana by the end of the year."

Balkhash TPP

Issekeshev also said that Kazakhstan is carrying out preparation work for the construction of the Balkhash Thermal Power Plant (TPP).

"The executor of the Samruk-Energo JSC project has created a Joint Venture (JV) with South Korean companies such as Samsung and Kepko. Work is currently underway to prepare a site that includes the construction of a water treatment plant and a working village," he said.

The construction of Balkhash TPP is an important project for reducing energy shortage in the southern regions, and decreasing their energy dependence.

Tender

The Minister went on to note that around 50 fields will be put up for tender on the exploratory mining of solid minerals in the coming month.

According to him, the tender will take place by late 2013.