Mineral Industry Of Kazakhstan
Kazakhstan ranks second only to Russia among the countries of the CIS in its quantity of mineral production. It is endowed with large reserves of a wide range of metallic ores, industrial minerals, and fuels, and its metallurgical sector is a major producer of a large number of metals from domestic and imported raw materials. In 2005, its metal mining sector produced bauxite, chromite, copper, iron, lead, manganese, and zinc ores, and its metallurgical sector produced such metals as beryllium, bismuth, cadmium, copper, ferroalloys, lead, magnesium, rhenium, steel, titanium, and zinc. The country produced significant amounts of other nonferrous and industrial mineral products, such as alumina, arsenic, barite, gold, molybdenum, phosphate rock, and tungsten. The country was a large producer of mineral fuels, including coal, natural gas, oil, and uranium.
The country’s economy is heavily dependent on the production of minerals. Output from Kazakhstan’s mineral and natural resources sector for 2004 accounted for 74.1% of the value of industrial production, of which 43.1% came from the oil and gas condensate extraction. In 2004, the mineral extraction sector accounted for 32% of the GDP, employed 191,000 employees, and accounted for 33.1% of capital investment and 64.5% of direct foreign investment, of which 63.5% was in the oil sector.
Since the breakup of the Soviet Union, Kazakhstan has been perceived globally as a supplier of mineral commodities, which include oil, nonferrous metals, and uranium. Kazakhstan has been developing a rich mineral resource endowment. Intensive raw materials production and exports have helped the economy to overcome economic crises and ensured high rates of economic growth during the past 3 years.
The economy of Kazakhstan has been growing owing to the state policy of attracting foreign investment into its extraction industries. Kazakhstan was the first CIS country assigned with investment sovereign rating, and the World Bank has listed Kazakhstan among the 20 most attractive countries for investment. As a small economy with large fuel and mineral resources, however, Kazakhstan has not been particularly attractive for investment in the manufacturing sector, which makes the country highly vulnerable to fluctuations in commodity prices.
In view of the danger of the economy not using effectively the excess profits from the extracting sectors and foreseeing a possible negative effect from a sharp downfall of oil prices, the government established the National Fund to accumulate surplus oil revenues. The revenues in the Fund are to be used for the overall development of the national economy.
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