|АКИpress CA-News Tazabek Turmush||ADVERTISE WITH US SUBSCRIBE|
AKIPRESS.COM - With confidence seeping back into the global mining sector it's inevitable that companies will once again start to look at exploring for new reserves, and most likely come to some uncomfortable realizations, Reuters reported.
The choice facing both major and junior mining companies is increasingly bifurcated; either work in relatively risk-free countries and chase expensive and dwindling deposits, or go to frontier markets and take on uncertain regulatory environments, challenging conditions and quite often corrupt officials.
While traditional mining powerhouses like Australia, Canada and Chile still offer opportunities, mining companies are under no illusion about the high cost of operating in these jurisdictions and the relatively low chances of scoring a major new deposit.
Rather the next large reserve of minerals such as copper, zinc, cobalt and others is likely to be found in places that are hard to do business in.
Africa is often cited as a continent filled with promise, but outside of countries with existing mineral sectors, such as South Africa and Zambia, it may just be too tough for many companies.
Step forward Kazakhstan, already a major producer of zinc, copper and other minerals, and a country that offers opportunities for those willing to take risks.
The Astana Mining and Metallurgy Forum, held last week in the Central Asian nation's capital, aimed to showcase what the country had to offer, and what steps the government was taking to attract investment.
On the surface it all sounded quite positive, with the government ministers present talking openly about the problems they have faced in the past, and committing to introduce a mining code based on that in Western Australia state, one of the world's top jurisdictions for investment in the sector.
"There is a lot to be done, and we will do it, but it will take some time," Alik Aidarbayev, the first vice minister for Investments and Development, told Reuters on the sideline of the conference.
But behind the optimism, there are numerous issues that need to be tackled before global mining companies may feel comfortable taking the plunge into what is one of the last great under-explored mineral prospects in the world.
Kazakhstan, the ninth-largest country in the world and the biggest landlocked nation, ranks poorly on the Transparency International Corruption Index, and well below top mining countries.
It scored 29 out of a 100 points in 2016, with the scale ranking 0 as totally corrupt and 100 as perfectly clean. Since 2010 its score has barely shifted, ranging between 26 and 29 points, suggesting there has been little improvement in the situation.
By comparison, Australia scores 79 points, Canada 82, Chile 66 and South Africa 45. Countries that offer mining opportunities that score the same or worse than Kazakhstan include Russia with an identical 29, Democratic Republic of Congo with 21 and Zimbabwe with 22.