Kazakhstan Seeks to Boost Gold Exploration

SauranbayevASTANA – Vice Minister of Industry and New Technologies Nurlan Sauranbayev said at a recent press briefing in Astana that Kazakhstan must develop its gold exploration efforts to extract the country’s abundant gold resources.

Kazakhstan has two thousand tonnes of extractable gold reserves and annual production between 20-30 tonnes. But experts believe the country has subsoil reserves of more than 10,000 tonnes. Gold is the basis of the global financial system and has been a symbol of wealth and stability since ancient times. Today, this precious metal is used by practically all states as an insurance reserve fund.

At the beginning of the 20th century, according to the World Gold Council (WGC), the ten countries possessing the largest gold reserves included the U.S. (almost nine thousand tonnes), Germany and the International Monetary Fund (IMF). They were followed by France, Italy, Switzerland, Russia, Japan, the Netherlands, China and India.

In the 21th century, the situation changed slightly. In the last 10 years, Russia has increased its gold reserves to diversify its foreign exchange reserves and help the rouble become an international reserve currency.

Another neighbour, China, also aspires to give its yuan a reserve status in world trade as a result of its increased gold reserves.

As for Kazakhstan, it is now one of the leaders in gold mining in the Commonwealth of Independent States (CIS) and is among the top ten gold-producing countries.

Kazakhstan has many natural resourses and more than 200 gold deposits are scattered across all parts of the country. Its industrial production in Kazakhstan began after the establishment of Soviet power in the republic and the beginning of its active exploration.

Today, according to Sauranbayev, Kazakhstan has 1,159 tonnes of gold ready for production.

“We have another 1,107 tonnes. But these volumes need additional exploration,” said Sauranbayev, speaking at a recent press briefing at the Central Communications Service.

According to official data, the annual production of this precious metal in Kazakhstan does not exceed 20-30 tonnes and can be increased with additional exploration.

To Increase Gold Mining 

At the end of last year, Kazakhstan commissioned a gold refinery that is expected to process 18 tonnes of gold ore in 2014. The design capacity of the plant is 25 tonnes of refined gold and 50 tonnes of silver.

In recent years, there was a decline in production. The plant’s management concluded agreements with major mining companies for the supply of raw materials and processing of gold up to 10 tonnes per year.

However, according to the vice-minister, the forecast reserves of gold in Kazakhstan are about 10,000 tonnes. But these volumes are to be extracted. Sauranbayev noted in his press conference that Kazakh President Nursultan Nazarbayev has called for gold production to reach 70 tonnes per year.

“The solution to this problem will require extensive exploration work at the expense of both state budget and subsoil users,” Sauranbayev said.

In Search of “Closets”

This week, the ministry’s geology committee announced the launch of two large-scale projects in the field of exploration:  Rudny Altai (East Kazakhstan) and Sary-Arka. Both projects will be implemented in 2018-2020.

“Thirty-six billion tenge (US$197 million) is allocated for the Sary-Arka project on exploration in the Saryarka region, which includes the Akmola and Karaganda regions,” said Sauranbayev, adding that about 30 billion (US$164 million)  tenge is allotted for the Rudny Altai project in the East Kazakhstan region and half of this sum will be invested by the national company Kazzinc.

The Sary-Arka district and East Kazakhstan region have a strong resource base and the goal of the two projects is to attract investments from transnational companies in exploration, the transfer of advanced technologies and the execution of the state order on geological exploration.

Both projects will be implemented by the Committee of Geology in partnership with local authorities and large transnational companies, such as Rio Tinto, Kazakhmys and Kazzinc.

“In case of successful implementation of these two projects, we plan in the future to explore other regions of Kazakhstan using state funds and private investments,” Sauranbayev said.

Geological Cluster is Required

The activation of exploration, according to experts, is just one of the areas to achieve the goal set for the government by the head of state. It is no longer possible to conduct exploration by the outdated methods that were used in the Soviet era. The world has moved ahead in the development of this industry. Kazakhstan is behind these trends.

“Every year, thousands of samples of various geological material are exported from our country to the United States, Australia, Canada, France, Italy, Russia, South Africa and even to neighbouring Kyrgyzstan, which have specialised laboratories, research institutes and a  powerful exploration school,” the vice minister said.

The number of geologists in the U.S. is almost 9,000 and the annual budget of the service is $1 billion. In the UK, there are more than 800 professionals in the field of exploration with an annual budget of $55 million.

In countries where this industry received government support (Canada, Australia, the U.S., South Africa, Brazil) a significant increase in mineral reserves has been observed in recent years due to the application of new technologies that allow exploration at great depths.

“The Turkish geological centre, which was founded in 1935 on the initiative of Mustafa Kemal Ataturk, has an annual budget of more than $200 million. It consists of 52 buildings, employing over three thousand people,” added the vice minister.

According to him, in the last 13 years, half a million samples of geological materials were exported from Kazakhstan. There are several reasons for this situation and one of them is the overall decline in geological science in the republic after the collapse of the Soviet Union.

Secondly, there is a serious shortage of professionals, which is caused by the ageing of the workforce (average age is 65 years) and the low level of training of young specialists.

The answer is to provide the industy with substantial financial and technological support.

And this year, upon the President’s instruction, geological exploration will be given a new status in an effort to attract new investments and technologies to the country.

The key will be the creation of a geological cluster, including the School of Mining, Institute of Earth Sciences and the Centre for Geological Research in Kazakhstan. The first step has already been taken. Recently in Astana, the company Kazgeologiya and Nazarbayev University signed a memorandum for the establishment of the Centre for Geological Exploration in Kazakhstan.

“The new structure will be involved in the creation in the country of a world-class exploration infrastructure. Thus, we are on the threshold of new discoveries,” concluded Sauranbayev.

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