Mining & Smelting

Mining represents 27% of the country’s GDP and has immense growth potential. 70 elements have been explored and 60 extracted so far in Kazakhstan. Its mineral and resources base consists of 5,004 fields with a net worth of $46,000 bln. Currently, the Industrialization Map of Kazakhstan includes 61 mining and smelting industry projects, with an investment of KZT1,500 bln ($10.0 bln).

Beside oil & gaz, Kakzakhstan is also one of the world’s major producers of natural resources and is one of the ten leading countries in the world for mineral reserves. It is the world’s leading uranium producer, and the third largest chrome producer. It is a large zinc producer and reports 13% of world zinc reserves. Other important minerals include manganese, iron ore, copper, lead, gold, coal, bauxite, phosphate, titanium, and tungsten.

Tungsten is found mainly in the minerals wolframite (iron–manganese tungstate (Fe,Mn)WO₄, which is a solid solution of the two minerals ferberite FeWO₄, and hübnerite MnWO₄) and scheelite (calcium tungstate (CaWO₄). Other tungsten minerals range in their level of abundance from moderate to very rare, and have almost no economical value.

Kazakhstan’s most valued prospects are tungsten-molybdenum deposits that have long been undeveloped due to low quality of the ore. In light of the recent increase in market price of tungsten-molybdenum products, there have been more investments into the rare metal deposit development. Currently the bulk of the tungsten-molybdenum ores are being developed, including the largest deposits of Verkhneye Karakty, Boguty, Karaoba and Koktenkol that make up ⅔ of the in-place rare metal reserves of the country.

The Drozhilovskoye moly-tungsten deposit, which is located about 4 km from Okrainka, a small settlement, is expected to have a 30-year mine life, while the Smirnovskoe moly-tungsten-copper deposit, situated about 41 km north of Karabalyk, the district centre in Northern Kazakhstan, is expected to have a mine life of 36 years.

At present, Kazakhstan’s own demand for these minerals is very small. This is why the primary objective set before the development of inactive tungsten and molybdenum deposits consists in finding the outlet market for the metals and their concentrates. If strategic long-term partners can be found, Kazakhstan is fully capable of establishing a cost-efficient production of tungsten and molybdenum under existing world market prices.

The market of tungsten

The strategic value of tungsten came to notice in the early 20^th century. British authorities acted in 1912 to free the Carrock mine from the German owned Cumbrian Mining Company and, during World War I, restrict German access elsewhere. In World War II, tungsten played a more significant role in background political dealings. Portugal, as the main European source of the element, was put under pressure from both sides, because of its deposits of wolframite ore at Panasqueira. Tungsten’s desirable properties such as resistance to high temperatures, its hardness and density, and its strengthening of alloys made it an important raw material for the arms industry, both as a constituent of weapons and equipment and employed in production itself, e.g., in tungsten carbide cutting tools for machining steel.

The tungsten production is dominated by China which holds 60% of known tungsten reserves (USGS) and accounts for +60% of demand and +80% of supply. However, grades from existing Chinese producers is declining and China imposes restrictions on production and export of concentrates. China net importer of concentrates in 2015, and continues to import. Existing stockpiles are close to depletion and producers don’t have the capacity to increase production. Most significant tungsten projects are at least 18 months to 2 years away from commercial production

Forecast demand growth of 4.0-5.5%/year pa to 2018. New capacity is required to meet global demand. Hemerdon Project will produce about 3.5% of forecast world demand. Approximately half of the tungsten is consumed for the production of hard materials — namely tungsten carbide — with the remaining major use being in alloys and steels. Less than 10% is used in other chemical compounds

Tungsten is not traded as a futures contract and cannot be tracked on exchanges like the London Metal Exchange. The prices are usually quoted for tungsten concentrate or WO₃.