In 2017, Kazakhstan is expected to finally bring the long-awaited new Mining Act into force with the aim of creating a more favorable investment climate for international mining companies and increasing the sector's attractiveness.

Kazakhstan is home to some of the largest mineral deposits in the world; however, the country has lagged behind with relevant explorations in the last couple of decades, with the last large-scale exploration taking place in the 1950s. The main reason for this is that the government has prioritized the oil and gas industry over the mining sector, which traditionally has not been seen as a commercial activity. However, certain statistics on the country's mineral reserves indicate that developing the mineral extractive activities sector may in fact be extremely beneficial. 30% of global chrome ore reserves, 25% of all manganese ore reserves, and 10% of all iron ore reserves are concentrated in Kazakhstan. More precisely, the country ranks first globally for uranium production, first in wolfram reserves, second in chromium and uranium, and is in the top-five countries in terms of manganese, silver, and zinc. It is 15th in terms of gold reserves, while by content in ore it occupies second place globally. It is also home to the largest undeveloped tin deposit in the world and has one of the top-10 largest vanadium deposits globally.

Mining has tremendous potential to be one of the drivers of the country's economy in the years to come, and a new Mining Act aimed at further boosting the sector's attractiveness is indeed the starting point. In 2014, President Nazarbayev launched the Kazakhstan 2050 Strategy, in which he stated the mining sector will play a vital role in the country's economy. International mining giants such as Rio Tinto and Freeport have long shown a keen interest in Kazakhstan's promising mining sector and have been in the country for years awaiting a more favorable investment climate. Some of the issues with the current legislation faced by international investors in Kazakhstan include the protection of rights for concessions, taxation, and employment law. However, reforming the mining law has been a top priority of the government and, as Doris Bradbury, the Chairperson of the American Chamber of Commerce in Kazakhstan, told TBY in an interview, was indeed the subject of business roundtables mediated by AmCham involving senior executives of international mining companies and Prime Minister Sagintayev. In 2014, the government laid out an ambitious plan to introduce a new subsoil and subsoil use code to bring Kazakhstan in line with other international jurisdictions. After years of talks and negotiations, the new Mining Act will be implemented in 3Q2017.

The new code is meant to address the simplification of subsoil use rights on the basis of best international practices and lift excessive bureaucratic administrative barriers; such simplified procedures have the clear objective of a transition to the international order of reserve estimates. In terms of selecting Australia as an example for the new regulatory framework, the Ministry of Investment and Development (MID), which is in charge of the new code, explained that “transparency and simplicity of procedures in granting subsoil use rights in this country is a benchmark in the world of investment attractiveness of mining." The ministry further stated that in order to ensure a significant influx of investors in exploration, the principle of “first come, first served," based on the Australian model, will be adopted and it will involve obtaining subsoil use rights online in just three days. Other areas covered by the new act include providing open access to geological information and digitalizing it, economic incentives such as land and property tax exemption and the application of international accounting standards for tax purposes, market development of junior companies, and providing guarantees to investors to carry out subsoil with stable conditions.

Kazakhstan's mining sector is set to grow to USD30 billion, which already accounts for declining commodity prices. As well prepared and efficient as the new law might be, it alone cannot attract an inflow of investments and boost the mining sector. Other external variables such as global commodity prices will have an important impact on stimulating the sector. Nevertheless, the new legislation is a promising start to creating an attractive investment climate, as a result of which established and new international players will enter or re-enter the market, conduct new explorations, and put Kazakhstan on the road to becoming a new international mining hub.