Speech

Speech by Charles Hendry MP at MINEX Central Asia

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Trade Envoy to Kazakhstan addresses 4th Mining and Mineral Exploration Forum, Astana, 17 April 2013

I am delighted to greet participants at the fourth Minex Central Asia, which has already established itself as such an important forum for exchanging expertise and contacts.

The mining industry in Kazakhstan is a highly important driver for economic development and growth accounting for some 17% of GDP. This can only rise in the future, given Kazakhstan’s great mineral wealth, export orientation and growing global demand.

The sector will also contribute to Kazakhstan’s economic and social objectives, through its contribution to regional development, diversification and jobs creation. Mining currently employs about 120,000 people in Kazakhstan, making it one of the strongest drivers of regional employment. At the same time, Kazakhstan is emerging as an international policy maker in minerals production, requiring it to take a more international approach to standards and strategies.

One of the lessons of the past decade is that all countries must continually improve their investment climate and Kazakhstan must be applauded for the steps that have been taken over the last few years through such initiatives as the Prime Ministers Investment Council and Foreign Investors Council.

Attracting foreign investment is a competitive business, and to successfully win incoming investment, Kazakhstan needs to provide the investment climate that appeals over that of other nations offering similar opportunities.

It is encouraging that the mining law and the subsoil user procurement laws are now subject to review. A producer inevitably faces exposure to revenue risk, such as fluctuating commodity prices, and we need to be aware how these risks might be mitigated within these new laws.

It can take anything from 8 to 15 years to take a new large-scale mine from opening discussions and exploration all the way through production.

Therefore it is key that this work starts now in Kazakhstan to find the mines that will produce in the 2030’s and beyond, as other mines come to the end of their lifecycles.

The next round of exploration to discover these future mines will require the latest technology advances. There is also a need for increased mining education to fully realize Kazakhstan’s domestic mining potential.

I of course mention these areas as I believe that new technology and education are areas where the UK can offer real expertise to Kazakhstan.

Kazakhstan has had its candidate status for the Extractive Industires Transparency Initiative (EITI) extended until August 2013. EITI aims to set a global standard for transparency in oil, gas and mining.

It is a coalition of governments, companies and civil society that provides a standard for companies to publish what they pay and for governments to disclose what they receive, in an effort to make natural resources benefit all.

EITI is of benefit to Kazakhstan for many reasons, such as giving international recognition, demonstrating regional leadership, and encouraging further international investment.

We hope that the Government of Kazakhstan will continue to engage strongly with this initiative and that in August this year we can celebrate Kazakhstan becoming a member of the EITI family. In the meantime, it is vital that companies operating here work to the highest global standards.

Of course, many British companies are already involved with the exciting developments in the mining sector, most in tandem with Kazakhstani partners.

These companies offer strong UK and international expertise, built up over many years. We have an excellent track record of project management and delivery and our service and supply chain companies ensure that large and complex projects remain on track.

We are well placed to help with the introduction of new technologies in the exploration, production and processing of mineral resources in the utilization of automatic process control systems and in the training and development of personnel according to industry best practice.

I am delighted to underline the major commitment of Rio Tinto to the Kazakhstani market.

Rio Tinto, the National Company JSC “Kazgeologiya” and MINT have entered into agreements in relation to the formation of an exploration joint venture, focused on exploration, technology and training and this represents the logical next step in the development of a long term strategic partnership.

There will be sharing of technology and Rio Tinto will also be involved in training of Kazakh specialists as part of a programme to ensure maximum benefit to Kazakhstan.

As well as specialising in many technical areas of mining, the UK is also in the forefront of new developments in mining safety, low carbon technologies and energy efficiency.

We also want to add capacity by working closely with Kazakhstan on educational projects, as we recognise that, by increasing the skills base, Kazakhstan can continue to climb ever higher up the value chain.

It is good to see strong UK involvement at MINEX alongside major Kazakhstani and international mining companies.

I look forward to the contributions of committed and experienced companies such as SRK Consulting, Wardell Armstrong, Rio Tinto, Hambledon Mining, Central Asia Metals and Frontier Mining.

I wish the organisers and all participants an interesting and successful event. This is a country with exceptional resources, and we look forward to being trusted, long-term partners, as those resources are developed.

Thank you for your attention.