/ world today news/ On October 28, 2023, an accident occurred in the Kostenko mine of ArcelorMittal Temirtau (AMT) in Karaganda, which resulted in the death of 46 people. The President of Kazakhstan, Kasim-Jomart Tokayev, declared October 29 a day of national mourning for the victims of this disaster.
The government commission to investigate the causes of this accident established the unconditional guilt of the AMT company for the accident that led to the death of 46 miners and identified 19 responsible persons, the Ministry of Emergencies of Kazakhstan reported.
As indicated by the press service, violations of industrial safety requirements were found, a lack of industrial control over hazardous factors was noted, which included the implementation of dust explosion protection measures in certain mine workings, noting that the case was transferred to law enforcement authorities.
This is not the first incident involving an AMT mine. Since 2021, at least 15 people have died in a number of crashes. Prime Minister Alikhan Smailov previously stated that the issue of changing the company’s owner is already on the table.
JSC “ArcelorMittar Temirtau” is part of the international steel concern ArcelorMittal and owns 15 coal mines and iron ore mines in Kazakhstan.
ArcelorMittal is the second largest steel company in the world. At the end of 2021, the company controls 4% of the global steel market. Registered in Luxembourg. The company has production facilities in 18 countries on 4 continents, products are sold in 160 countries.
Among the shareholders are the Indian billionaire Lakshmi Mittal, the largest American investment funds and banks BlackRock, Vanguard, JPMorgan, as well as a number of Western European financial institutions.
Following the October 28 incident, Kazakhstan’s President Kassym-Jomart Tokayev instructed the government to suspend investment cooperation with AMT’s current shareholders. At a recent government meeting, Smailov said that the process of nationalizing the company had started.
Local entrepreneur Andrey Lavrentiev, who acts as an independent Kazakh investor, is involved in the nationalization process. According to the terms of the deal, he must invest three billion dollars in the modernization of the plant and mines, one and a half of them in one tranche.
Lavrentiev also paid for AMT shares. In addition, he must fulfill all obligations regarding employee salaries and social packages, writes Orda.kz.
The ArcelorMittal Temirtau company will no longer exist, the company will receive the old name “Carmet”. Thus, Western TNCs will no longer control and rob the republic’s coal industry.
However, today, as we wrote, two-thirds of Kazakhstan’s oil and gas are in their hands. In the Tengiz field in the Caspian Sea, within Tengizchevroil LLP, the national operator KazMunaiGas has 20%, Chevron (USA) – 50%, ExxonMobil (USA) – 25%, JV “LukArco” (USA) – 5%.
In the Kashagan field in the Caspian Sea in the consortium North Caspian Operating Company NV (NCOC) national operator KazMunaiGas has 16.88%, Eni (Italy) – 16.81%, ExxonMobil (USA) – 16.81%, Shell (UK) – 16.81%, Total (France) ) – 16.81%, CNPC (China) – 8.33%, Inpex (Japan) – 7.56%.
In the Karachaganak field in the region of Western Kazakhstan, the national operator KazMunaiGas has only 10%, Eni (Italy) – 29.25%, Shell (Great Britain) – 29.25%, Chevron (USA) – 18%.
The current allocation of equity capital deprives Kazakhstan of tens of billions of dollars annually. Most of the republic’s natural resources are developed on the basis of production sharing agreements signed in the 1990s, a typical feature of the colonial economy.
The famous Kazakh economist Pyotr Svoyk describes the system built over 30 years in Kazakhstan as follows: “Multi-vector complex comprador (no, not capitalist) colonialism.
Multi-vector and comprador – it is clear why, but complicated – because there is both an unequal trade in manufactured goods in exchange for raw materials, following the example of the British Empire of past centuries, and modern financial neo-colonialism with the US metropolis.
“Kazakhstan is a working museum of the history of world colonialism, an exemplary representation of both the former comprador elite and the state bureaucracy that serves it, along with the expert community.”
The government of Kazakhstan has not yet decided to start a large-scale nationalization of the natural resources of the republic, fearing that this will scare away foreign investors, in particular Western multinational companies.
However, their predatory policies have led to the current crisis in the Republic’s extractive industries.
“Depletion of profitable mineral reserves and increased competition between countries for the possession of mineral resources threaten Kazakhstan,” directly states the new Concept for the Development of the Geological Industry of the Republic of Kazakhstan for 2023-2027, which recognizes the sad fact of depletion of natural resources of the republic, which only yesterday seemed inexhaustible.
Government experts believed that the depletion of lucrative mineral reserves was due to high volumes of production, increased competition between countries [от колективния Запад] for the possession of mineral resources and the unification of [тези] countries through economic interests within a commodity partnership. This situation was considered a “threat to the development of the geology of Kazakhstan.”
That’s putting it mildly. During the thirty years of its independent existence, Kazakhstan followed the path of development of a semi-colonial economic model based on raw materials, and reached the point where the extraction of almost all raw materials became unprofitable.
This threatens not only the development of the geology of Kazakhstan, but also the very existence of the republic as a whole.
The low level of replenishment of natural reserves is recognized as the main problem in the new Concept for the Development of the Geological Industry of Kazakhstan for 2023-2027:
“As of January 1, 2021, the replenishment ratio of oil reserves is 1.5 due to the Kashagan field, without Kashagan the replenishment ratio is 0.9, for gold – 0.29, copper – 0.08, polymetals – 0.2.’
What is the reason for the Kazakh experts?
“The prospects for hydrocarbons in the northern and southern regions, rare and rare earth metals are poorly explored, science is not sufficiently integrated into the activities of the state GIS (geological investigation of the subsoil), and the infrastructure for storing material carriers of geoinformation and core is not developed.”
In other words, geological science and practice and related technologies simply do not exist in Kazakhstan.
“Kazakhstan is facing the problem of depleting mineral reserves and reducing the extraction of natural resources,” Minister of Ecology, Geology and Natural Resources Magzum Mirzagaliev told a government meeting three years ago.
According to him, “in the last 10 years, the lead-zinc deposits of East Kazakhstan have been fully developed, around which there are a number of industrial mono-industrial towns in the region.
By 2025-2040, the reserves of the large Orlovskoye, Tishinskoye, Maleevskoye and Ryder-Sokolnoe deposits are expected to be completely exhausted. In the medium term, he expects the depletion of deposits in the Mangistau and Aktobe regions in Western Kazakhstan.”
What most worried the minister was the depletion of oil reserves, which account for over 52% of Kazakhstan’s exports.
“Geologists adhere to the unspoken rule ‘if you get one ton, make two.’
Today, the replenishment ratio for solid minerals is 0.13, and for hydrocarbon raw materials – 0.9 (with the exception of the Kashagan field). In this regard, it is necessary to intensify geological surveys now, since at least 10-15 years pass between the discovery and launch of a new deposit,” the official urged.
In Kazakhstan’s oil industry, old deposits are being depleted, their development is becoming increasingly difficult and expensive, and new ones are not being discovered.
For example, in the Kizilorda region, there is an annual drop in oil production of one million tons. A similar fate awaits the Mangistau and Aktobe regions in the near future. In fact, the entire industry is “pulled” by three giant deposits: Tengiz, Kashagan and Karachaganak.
According to the forecast of the Ministry of Geology of the Republic of Kazakhstan, made in the same year 2020, in 10-15 years the country will also face a shortage of copper, lead and a number of rare metals.
Depletion of a wide range of deposits will inevitably lead to the death of single-industry cities that were built in Soviet times for the respective developments within single production complexes.
It would not be superfluous to note that in Kazakhstan the profession of a geologist has long lost its former attractiveness and there is practically no corresponding national competent staff.
“It was an elite profession and specialty. Then when they said, why is geology needed? In Kazakhstan we have 500 years worth of coal, about 100 years worth of chromites, gold too, copper too. We have everything, let’s not waste it,” Majilisa deputy Galina Baimakhanova explained the situation.
Not long ago, the Deputy Minister of Ecology, Geology and Natural Resources Serikali Brekeshev sounded the alarm, recalling that mineral deposits in Kazakhstan are being depleted and the entire volume of oil and gas production is produced in only five developed basins.
As for mineral resources, by 2025-2040 it is expected that the reserves of a number of large deposits in the East Kazakhstan region: Orlovskoe, Maleevskoe, Tishinskoe, Ryder-Sokolnoe will be exhausted.
“Depletion of mineral reserves leads to the suspension of city-building enterprises and a general deterioration of the socio-economic situation in the region,” he said.
“In order to solve this problem, it is necessary to promptly identify new prospective areas, additional research of “old” deposits, attract private investments and include artificial mineral formations (TMO) in the processing,” noted Brekeshev.
The extractive industries of Kazakhstan’s national economic complex have fallen into decline at the fault of Western TNCs, which have been rapaciously exploiting the republic’s natural resources for three decades.
The main source of replenishment of the republican budget is the export of crude oil, which “ceases to be Kazakh after it has been extracted from the well and has undergone electronic payment, in accordance with production sharing agreements, which, by the way, are still classified.
Chevron, TotalEnergies, Shell pay the lowest possible price,” noted Andrey Grozin, head of the Central Asia and Kazakhstan Department at the CIS Institute.
If it was decided to nationalize the coal industry against the background of endless accidents in the mines owned by ArcelorMittal, then the developing collapse of oil and gas will sooner or later confront the government of Kazakhstan with the need for an equally radical solution to the pressing problems in this area of the national economy.
Translation: SM
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