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Revision of projects in Kazakhstan to increase subsoil users’ obligations by $ 27 billion

Business Materials 12 March 2013 07:03 (UTC +04:00)
This year the revision of technical projects on solid minerals will allow the government to increase the obligations of subsoil users by $ 27 billion, Kazakh vice minister of industry and new technologies Nurlan Sauranbayev told Trend on Wednesday.
Revision of projects in Kazakhstan to increase subsoil users’ obligations by $ 27 billion

Kazakhstan, Astana, March 9 /Trend D. Mukhtarov/

This year the revision of technical projects on solid minerals will allow the government to increase the obligations of subsoil users by $ 27 billion, Kazakh vice minister of industry and new technologies Nurlan Sauranbayev told Trend on Wednesday.

"When experts of our ministry started revising projects of contracts on solid minerals within the moratorium on issuing licenses for development of mineral deposits, we succeeded to impose additional obligations amounting to $ 12 billion. No we are going to impose obligations to the amount of $ 15 billion to the rest of the contract projects until the end of the year," Sauranbayev said.

He specified that today there are 600 contracts on subsoil use at the ministry including 400 contracts on solid minerals and 200 on water and other minerals.
"At present, about 70 percent of the 400 contracts have their projects. It was their revision that allowed imposing additional obligations amounting to $ 12 billion. Some 30 percent are not covered yet," the vice minister clarified.

Sauranbayev reminded that previously a lot of subsoil use contracts were being signed without submission of development projects that allowed subsoil users to include minimal expenses for themselves into the projects.
"Now the order has been changed, first the development project, then the contract. Of course these measures on withdrawal of contracts of unscrupulous subsoil users incited displeasure among some of them, but that is just one of the costs of our work," the vice minister said.

The moratorium on issuing licenses on subsoil use was imposed in 2008 when the government started preparing new tax legislation. The new tax code envisaging rejection of contract stability and tightening of extractive industry sector taxation came into effect in January 2009.

"The main aim of the moratorium was to bring in order subsoil use sector. All main fields were conveyed to subsoil users by 2008. Among them there were so called feedstock tourists who were reselling the fields at much higher prices without putting investing into their development themselves," the minister explained.

In November 2012 Kazakh President Nursultan Nazarbayev instructed the government to think about lifting the moratorium on extraction of some minerals to make the regions more attractive for investors.

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