Kazakhstan in world news: October-November 2006
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Kazakhstan in world news: October-November 2006

Prepared by Joseph Urbanas, Director of Kazakhstan Newsline Company


General News
Borat Movie and Bank Credit Demand push Kazakhstan Center Stage
Financial Standard Australia (November 16)

It’s not just the new Borat movie thats stirring interest in Kazakhstan, as the country is also experiencing rapid credit growth….But in a special report, Kazakhstani Banking System and Prudential Regulations: The Risks of Growth, Fitch Ratings said increasing reliance on foreign funding to fund this growth could pose significant risks for the sector….Dmitri Angarov, associate director in Fitch’s Financial Institutions group, said, “Such rapid ongoing and planned expansion, especially in areas which are intrinsically more risky, such as construction and SME lending, or where banks have less experience, for example retail and the Russian market, gives rise to substantial credit risks. High loan concentrations are also a source of concern.”…However, the report also said the quality of bank supervision in Kazakhstan is good for an emerging market, performance is sound and is supported by reasonable loan impairment levels. Liquidity levels are also buoyant….“(Kazakhstani) banks’ business models are also generally sound, with low levels of speculative trading, related party operations and non-core activities,” said the report…


Kazakhstan: President Tells West —
We Don’t Need Your Advice Eurasianet (November 19)

Kazakhstan’s President Nursultan Nazarbaev made some interesting comments on November 10th, when he said that Kazakhstan does not need lecturing and advice from Western nations….Kazakhstan is a huge and strategically important country in the middle of Eurasia. Its vast and untapped oil resources have attracted the attention of many countries eager to invest in its oil fields.

Fashionable “learnings”
from Kazakhstan The Washington Post (November 19)

“We’re beautiful women in Kazakhstan. We like expensive clothes.” says designer Saida Azhikhan, countering the image from the movie “Borat.”…Borat had nothing to do with it. It was just a coincidence, the timing of the Nov. 9 Central Asian fashion design show, featuring the latest couture from Kyrgyzstan, Uzbekistan and Kazakhstan. The embassy-sponsored event was unrelated to the box-office bonanza of that mustachioed faux Kazakh who has been causing a bit of an image problem for the good people of Eurasia with Sacha Baron Cohen’s mockumentary, “Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan.”…Still, Borat was by no means ignored. Central Asian Cultural Exchange President David Carlson said at the start of the show, “I’d like to give a little thanks to Borat for giving us some publicity. If you’re expecting any ugly women from Central Asia, you will be disappointed.”


Oil and Gas
Nazarbayev and Scaroni discuss
Oil and Gas Oil of Russia (October 11)

President Nursultan Nazarbayev and the CEO of Eni SpA, Paolo Scaroni discussed a broad range of issues related to the Italian company’s operations in Kazakhstan on October 10…Specifically, they reviewed the development of the Kashagan and Karachaganak deposits, Scaroni said during a briefing following the talks. “We also discussed our intention for building a pipeline going towards Uralsk, including an expansion of the CPC’s capacity, which is regarded as a main step for increasing transportation volumes” Scaroni stated….“Currently, we are beginning the third stage of the project for the exploration of Karachaganak, which means an increase in productivity,” he added….Scaroni noted that by the end of 2006, the partners in the Agip KCO consortium, which combines KMG, Exxon Mobile, Inpex Masela Ltd, Philips, Shell and Total, will obtain a new schedule for the exploration of the Kashagan deposit and the project budget.


Max Petroleum names former Kazakhstan Judicial Board Chairman Director
LifeStyle Extra (October 12)

Max Petroleum PLC, an oil and gas exploration and production company operating in Kazakhstan has named Maksut Narikbayev as a non-executive director….Narikbayev served as chairman of the Highest Judicial Board of Kazakhstan from 2003 to 2006, chairman of the Supreme Court of Kazakhstan from 1996 to 2000, and as prosecutor general of Kazakhstan from 1995 to 1996….Dauren Myrzagaliyev has resigned from the board as a non-executive director in order to serve as an employee of the company advising on regulatory matters.



Mining and Metallurgy
Mittal Temirtau Mine Workers consider
Wage Offer Business Week (October 12)
Workers at Mittal coal mines in Kazakhstan are considering a pay raise offer after ending a strike against the international steel giant, a union leader said yesterday….In a news conference televised across Kazakhstan, union official Vladimir Dubin said that the labor dispute is “far from over” despite the end of strike by workers at mines feeding — one of the world’s largest. The mines will become part of Arcelor Mittal, a company being formed by the merger of Mittal Steel Co. NV and Arcelor SA….”Our agreement is not final,” he said, stressing that workers have not yet approved the offer….Mittal’s management has said it would increase the miners’ pay by 20 per cent as of October, and by another 10 per cent in February. The miners were demanding a 40 per cent increase, better working conditions and improved safety equipment….The strike was sparked by a mid-September methane gas explosion that killed 41 workers at the Lenin Mine, one of eight coal miners that supply the Mittal Steel Temirtau plant and employ about 25,000 people, according to Business Week.



Outokumpu goes once more to Kazakhstan
Daily News Sunday Canada (October 13)

Outokumpu Technology of Finland has signed a contract with an affiliate of RUSSIAN COPPER to design and deliver a new copper-zinc concentrator for the Green Mountain 2 project….The contract is worth Cdn $42.75 million. Outokumpu will develop the basic design, supply all process equipment, and provide supervision services. The mill will handle 2.0 million tonnes of ore annually….This is Outokumpu’s second large concentrator delivered for Russian Copper. The Green Mountain 1 concentrator is currently being commissioned.

Real Estate
Direct Capital buys Kazakhstan lot for $4 Million
Globes online — Israel Business News (October 16)

Direct Capital Investments Ltd. plans to build a 120,000 square meter luxury office and residential project in Astana for an estimated $100 million….Direct Capital has bought a lot in Astana for $4 million, through a wholly-owned sub-subsidiary. The company plans to build a 120,000 square meter luxury office and residential project for an estimated $100 million….Direct Capital is the first Israeli public real estate company to invest in Kazakhstan. It bought a lot in Almaty for $3 million a few months ago. The company plans to build a 5,000 square meter residential and office building for NIS 25 million on the site.

Communications Technology
Russia hands over KazSat to Kazakhstan
RFE/RL (October 18)

Russia has given control of the KazSat-1 communications satellite and its ground control station to Kazakhstan….A message posted on the website of Roskosmos, Russia’s state space agency, says the transfer went into effect on October 17th….The Russian-built KazSat-1 is Kazakhstan’s first ever geostationary communications satellite. It was put into orbit on June 18 by a Russian launcher….Russia’s state-owned Khrunichev Space Research Center, which built KazSat-1, last month won a tender to develop a second Kazakhstan communications satellite….KazSat-2 is expected to cost twice as mush as KazSat-1. It is due to be launched in 2009, according to RFE/RL.




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