Enhancing Competitiveness and Attracting FDI to the Mining Sector

1OECD Eurasia Competitiveness Programme 1

CENTRAL ASIA INITIATIVEKazakhstan Mining Competitiveness Project

Enhancing Competitiveness and Attracting FDI to the Mining Sector5th Working Group meeting, 21 June 2016

2OECD Eurasia Competitiveness Programme

The OECD Eurasia Competitiveness ProgrammeOECD Council Mandate covering thirteen countries

Afghanistan, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Republic of Moldova, Mongolia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan

Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.

The OECD Eurasia Competitiveness Programme was launched in 2008 and aims at contributing to economic growth and development in eleven countries of the former Soviet Union as well as Afghanistan and Mongolia


• Improving the rule of law and regulations is the main barrier to investment in Kazakhstan's mining sector.

• Kazakhstan’s future mining code would benefit from being aligned with OECD best practices, in particular regarding pre-emptive rights, licensing process, security of tenure, and arbitration

• While current global investments in exploration fell, establishing solid foundations on rule of law, investment promotion, and access to capital can increase attractiveness for future investment in exploration, including for Junior Explorers

• First findings on stimulating local linkages and diversifying the value chain suggest the need to facilitate local capabilities, increase matchmaking, and improve access to finance while working on horizontal policies (e.g. human capital and skills devlopment).

Reminder: Summary of our initial findings


As agreed at the 2nd Working Group meeting, the Project continued to focus on 4 priority areas of work

Investment Promotion and Policies (IPP) to attract junior

enterprisesThe Project disseminated the IPP framework with

the MID and Kaznex Invest.

Stimulation of local linkagesThe Project organised a dedicated workshop in

January 2016 in Astana on local content requirements in mineral-rich countries, with a

focus on backwards linkages.

Rule of law and regulations

The Project extended the analysis of the mining related regulatory framework to environmental

regulations, land rehabilitation and mining taxation, providing observations on a draft of the

SSU Code

Human capital as a means to diversify

the value chain

The Project continues to build on the analysis based on the results of fact-finding mission

conducted to Astana in December 2015 and based on desk research.

Priority areas of work Main activities since December 2015


• Part 1: Highlights on taxation regimes in mining the industry- Summary of key points on the capacity building seminar: Taxation regimes in

mining industry, with a focus on the mineral-rich OECD countries by Mr. Dan Devlin, Sr Economist, OECD

• Part 2: Environmental payments in the mining industry- Presentation by Mr. Krzysztof Michalak, Senior Programme Manager,

OECD, with an overview of environmental payments for regulating mining activities and operations in a fair and sustainable framework and reactions from the Ministry of Energy

• Part 3: Environmental payments in the mining industry in local and international context

- Interventions by representatives of the Republican Association of Mining Enterprises, the Kazakhstan Business Council for Sustainable Development, GIZ and Dechert

• Project planning and next steps

Agenda


Key decisions for today

1. Continue to adopt and integrate OECD good practices on taxation in the mining sector in Kazakhstan

2. Promote environmental responsibility and further encourage cross-sector dialogue to adopt a sustainable use of resources through the effective use of environmental charges in line with OECD good practices

3. Agree on the topics for further analysis in the framework of the project

• Voluntary environmental compliance in mining• Land rights allocation and land owners’ rights of disposition,

possession and use of subsoil• Waste management regulation and effective mine closure


OECDWorking Group members

Immediate actions

• Present insights and expertise on agreed policy areas, including case studies

• Organise next Working Group and capacity building session

In Q3 2016

By the next WG

meeting in October

2016

• Adjust action plan to the Working Group feedback

• Pursue in-depth analysis on agreed policy areas in Kazakhstan

• Involve additional experts on the agreed policy areas

• Provide additional information and insights on the agreed policy areas

• Attend the next Working Group

• Approve the policy areas for the next Working Group meeting

• Provide key information/documents on the existing situation upon OECD request

Next steps for the project until October 2016


2015 2016Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project Working Groups, events and missions

20-24 Feb 20151st WG / Project

launch

8-12 June 2015 2nd WG

30-31 March 2016 4th WG

June 20165th WG & Capacity Building

28 Sept - 2 Oct 2015Fact-finding

mission

7-11 Dec 2015 3rd WG

20-24 April 2015Fact-finding

mission

17-18 JuneAMM

Detailed project work plan 2015-16 (1/2)Working Groups, missions and related events

15-16 JuneBRGM - AMM

October 2016 (tbc)

6th WG

December2016 (tbc)

7th WG

9OECD Eurasia Competitiveness ProgrammeOECD Eurasia Competitiveness Programme

9

Contact details:

Jean-François LENGELLEProject ManagerOECD Eurasia Competitiveness Programmee-mail: [email protected]

Antonio SOMMAHead of the OECD Eurasia Competitiveness Programmee-mail: [email protected]

Ana DELIGNYPolicy AnalystOECD Eurasia Competitiveness Programmee-mail: [email protected]

Anna ELISEEVAPolicy AnalystOECD Regulations for Competitiveness Projecte-mail: [email protected]

Miguel CASTROProject Co-ordinator OECD Regulations for Competitiveness Projecte-mail: [email protected]

mailto:[email protected]



