Dear guests, ladies and gentlemen,
I am delighted to be here at this year’s Mining and Exploration Forum. Thank you to the organisers for the opportunity to give a British perspective on Kazakhstan’s mining sector. This is a sector of great importance to Kazakhstan’s economic development. But it is also a sector which has great potential but which is yet to be fully realised.
Minister Issekeshev, Ladies and Gentlemen, it is an honour to be here this morning at the 7th Central Asian Mining and Exploration Forum. A year ago, I stood here and talked about the UK’s perspective on Kazakhstan’s mining sector and the opportunity that it provides for new collaborations and partnerships between Kazakh and UK companies.
It has been a difficult twelve months for the global economy. The fall of the oil price and low commodity prices have had major impacts on Government budgets across the world. But the global recession also brings opportunity. Opportunity to reform or to change – and opportunity to test new markets, strengthen partnerships, create new joint ventures and increase our trade and investment.
There is still huge interest in the Kazakhstan mining sector, which is why we are all here today. With over 90% of the countries’ mineral resources underexplored, and the widespread use of outdated technology, a good opportunity for collaboration exists.
President Nazarbayev visited the UK last November, which helped to develop and strengthen ever closer links between our two countries. The visit saw the signing of a number of agreements and Memoranda of Understanding between Kazakhstan and the UK in the mining sector. It also witnessed an MoU between the Ministry of Investment and Development and CRIRSCO on the assessment of mineral reserves and the introduction of international reporting standards in Kazakhstan.
To coincide with the Presidential visit, a meeting of the mining sub-group took place under the joint Inter Government Commission. This sub-group has continued to meet regularly to develop stronger business engagement and bring UK expertise, technologies and finance to mining projects in Kazakhstan. Over $1.75bn Letters of Interest have been offered by UK Export Finance to help provide funding guarantees for mining projects. And while there have been positive discussions on the potential for collaboration, regrettably, it has been difficult to identify mining projects, which are in a position to take advantage of this financial offer. I hope that events such as Minex and the regular meetings of the mining sub-group will identify and focus on new areas of collaboration between our countries.
The Prime Minister’s new Trade Envoy, Lord Astor of Hever, will visit Kazakhstan in late May. The Inter Government Commission will take place in London in the autumn. These events will provide further platforms for our companies and organisations to progress their plans and potential partnerships.
Foreign direct investment does not “just happen.” Foreign investors require a stable and predictable investment climate, open and transparent governance and access to reliable geo-data. But investors also need a clear understanding of the potential gain from their investments. Company boards and shareholders need clear evidence of the expected return. Any potential investment is not part of the company’s Corporate Social Responsibility policy. And in a global market, Kazakhstan has to compete with other jurisdictions that attract foreign direct investment.
The draft Mining Code will be a major step forward in establishing a platform to ensure consistent implementation and administration with a clear and transparent decision making process. I’m sure that this issue will be discussed in much detail over the next days. The UK Government supports this initiative and I know Minister Issekeshev and his team at the Ministry have been working on this to ensure that the finished product provides a clear platform for the mining industry in Kazakhstan. Implementation and consistent application of this new code will be key. I understand that the European Bank of Reconstruction and Development will support this process and the UK, with our extensive legal and consultancy capability, stands ready to work with you to support this process, and thereby ensure maximum effectiveness.
Additionally, having internationally compliant resource statements ensures that investors understand the geological potential of individual projects. The adoption of the CRIRSCO standard, is a further positive move in attracting international investors.
I am delighted that we have a number of UK companies that are attending or exhibiting at MINEX – Rio Tinto, SRK Consulting, Wardell Armstrong, Tensar, Behre Dolbear, IGS (International Geoscience Services), GBM Minerals Engineering Consultants and Joy Global. I would encourage you to meet with those companies and hear first-hand about some of the latest innovative and cutting edge technology offers. The UK has a rich experience of knowledge transfer and a thriving technology sector.
The UK is leading the way in developing technology including the use of Big Data and the Internet of Things in new and exciting ways, in order to enhance productivity and efficiency.
Specifically in the mining sector, the UK has examples such as:
Petrolab’s I-MIN portable laboratory system, which provides rapid onsite analysis of mineral samples, reducing processing time;
Intellisence’s real time data management, which allows users to understand power demands and remotely regulate energy usage;
Renishaw’s laser scanning system for site mapping, blast optimisation and measurement.
Smart Cities represents the optimisation and use of enabling technology to provide a more sustainable, greener and healthier lifestyle for the citizen. The UK is a leader in the underpinning components of Smart and Future Cities that includes the technologies, applications, standards, experience and thought leadership.
EXPO2017, with its theme of Future Energy, will be a magnet for renewable and clean technology companies, including clean-coal technology. The UK pavilion, which is at the design stage currently, will be one of the largest international pavilions on site and will be an excellent opportunity to showcase the UK’s innovation in energy related technology, including the mining sector. I encourage you all to visit EXPO2017 next year.
To conclude, the use of new technologies, innovation and collaboration between countries and organisations will be essential to meet the challenges of the current economic climate and to help transform the mining sector. Attracting investment will continue to be difficult but transparent processes and the need to identify sound, investible projects will be crucial in the long-term development of the mining sector in Kazakhstan.
Ladies and Gentlemen, the UK is committed to working with Kazakhstan and its neighbours in the mining sector. We look forward to continuing as a trusted and long term partner as this important sector develops.
I wish you all a productive and successful MINEX.