Three regions want their own metallurgical plants, but Tokayev doubts demand

The Head of State reminded that similar production facilities in these regions are planned to be opened with the help of investors, and raised the question of the sales market. The President called for taking demand into account and strengthening coordination between government agencies.

The essence in brief

• The President called plans for plants in three regions insufficiently justified: the country already has Qarmet.
• Tokayev's main question: will the products of the new enterprises be in demand on the market.
• He proposed treating geology as a high-tech industry, opening up geological data and attracting private money.
• The government must submit proposals on reserves of critical metals by the end of the year.

Why the President doubts the new plants

Tokayev reminded that a large metallurgical enterprise, Qarmet, is already operating in the country, while in three more regions similar production facilities are planned to be opened with the help of investors.

"For example, a large metallurgical enterprise, Qarmet, operates in the country. Despite this, the opening of similar production facilities is planned in three more regions with the help of investors. Will the products of these enterprises be in demand on the market? Probably, there is no clear answer to this question," the President asked.

According to the President, there is probably no answer to it, so the benefit of such decisions is doubtful. Without strengthening interdepartmental coordination, he warned, "our economy will lose its potential," and the government's role in this matter must be significantly strengthened.

New enterprises, he said, must not create obstacles for existing local businesses, and when attracting investors, each region and industry must be studied in detail.

"At the same time, the specialization of regions must not turn into dependence on a single industry or a single large enterprise," the Head of State believes.

Each region must rely on its own competitive advantages. Around anchor specialization, as Tokayev said, a full-fledged ecosystem is needed: education, applied science, logistics, services, related industries and technological entrepreneurship. He is confident that the "People's Construction" program will help with this as well.

What the President proposed on geological exploration

Tokayev believes that approaches to geological exploration need to be radically changed:

"Kazakhstan possesses a rich mineral resource base; for us this is a strategic advantage. Therefore, approaches to geological exploration must be radically changed. It is obvious that searching for new deposits with outdated methods will not bring positive results. We must turn geology into a high-tech industry."

Among the proposals:

• more actively attract private capital to the search for and exploration of new deposits;
• create a national system for managing reserves of critical metals with long-term financing;
• ensure guaranteed demand through offtake contracts (long-term agreements under which the buyer undertakes in advance to purchase products);
• work out, according to experts, the creation of a Fund for Non-Ferrous and Rare Earth Metals;
• integrate Kazakhstan into global production chains: "The ultimate goal is the integration of Kazakhstan into global production chains." Export policy, according to the President, must serve the same goal.

The first steps in this direction are already being taken: on the instructions of the Head of State, the country will create a regional research center for rare earth metals with three laboratories. Construction will begin in 2027. Based on the results of geological exploration in 2024-2025, 935.4 thousand tons of predicted resources of rare earth metals were obtained, but these are estimates for promising areas, not approved reserves.

What deadlines the government has

The government must submit proposals on the reserve management system and offtake contracts to the President by the end of the year, after discussing them with the business community. Guaranteed demand for domestic producers was called by the Head of State one of the cabinet's main tasks. In addition, the government must establish strategic partnerships with global leaders in these areas.

Which metallurgical projects are already underway in Kazakhstan

One of the major projects is the Aktogay copper smelter in the Abai region: Tokayev gave the start to its construction on October 20. The plant is designed for 300 thousand tons of cathode copper per year, investments will amount to about $1.8 billion, and the first cathode is planned to be produced in 2030.

The state wants to keep raw materials for such plants in the country: the Ministry of Industry is working on an export duty on copper concentrate. At the same time, the authorities aim to double copper ore extraction to 300 million tons per year by 2030.

There are also smaller launches. In the Akmola region, an enterprise for processing lead raw materials has been opened. We wrote about the growth in copper extraction: ore extraction grew 4.3 times, and copper output by 1.3 times.

Author's conclusion

The President contrasted three regional projects with one operating giant, Qarmet, and asked about the market, not about capacity. Tokayev placed market demand at the center of the assessment of new plants, and the deadline for the government's proposals is by the end of the year.