www.invest.gov.kz +7 7172 620 620 CURRENT STANDINGS OF KAZAKHSTANS - - PowerPoint PPT Presentation

www.invest.gov.kz +7 7172 620 620

CURRENT STANDINGS OF KAZAKHSTAN’S ECONOMY

%, to the corresponding period of the previous year Source: Ministry of National Economy of Kazakhstan

Short-term Economic Indicator (2019-2020) www.invest.gov.kz +7 7172 620 620

Basic Sectors

Agriculture Industrial Construction Trade Transport and storage Communication January-March 2020 January-April 2020

Measures by the Government:

 Early quarantine lockdown  Early medical response  Financial assistance to SMEs  Targeted social assistance  Entrepreneurship support  Lower basic interest rate  Comprehensive anti-crisis program

STRATEGIC LOCATION

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Routes Distance, кm Travel time, days Through Kazakhstan 9-10 ths. 13-15 Trans Siberian route 11-12 ths 18-20 The Northern Sea Route 14 -15 ths. 33-35 South Sea Route 23 000 ths. 45-60 New state infrastructure program Nurly Zhol with 112 investment projects $13 billion by 2025 ROLE OF KAZAKHSTAN IN THE NEW LAND-SEA CORRIDOR

WHY KAZAKHSTAN?

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INVESTOR’S RIGHTS PROTECTION

The Court of the Astana International Financial Centre and International Arbitration Center – the Common Law court system The specialized judicial board of the Supreme Court and the Court of Nur-Sultan city for investment dispute resolution Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan Coordination Council chaired by the Prime Minister Investment Ombudsman – the Prime Minister of the Republic of Kazakhstan Council on Improving Investment Climate under the Government

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INVESTMENT INCENTIVES

13 Special Economic Zones 24 Industrial Zones

Investment Contract

Corporate income tax Land tax, VAT Property tax Customs duties

0%

Land plot Ready infrastructure on “plug-and- play” basis Simplified procedure for foreign labour employment

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INVESTMENT CLIMATE

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www.invest.gov.kz +7 7172 620 620

FOREIGN DIRECT INVESTMENTS IN KAZAKHSTAN

*In millions of USD $15,368 $21,367 $20,960 $24,263 $24,115

$5,744 $7,969 $5,935 $7,350 $7,272 $2,770 $3,418 $3,693 $5,343 $5,548 $1,907 $2,702 $2,965 $2,541 $2,246

$834 $975 $1,083 $1,476 $1,678

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000

2015 2016 2017 2018 2019

VOLUME OF FDI TO KAZAKHSTAN

Total FDI Netherlands USA Switzerland China

Top 10 Investor Countries:

Netherlands USA Switzerland China France Russia Belgium UK Turkey Japan

TOTAL: $340 BILLION

MULTINATIONAL INVESTORS IN KAZAKHSTAN

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SUPPORT BY KAZAKH INVEST

“One-stop shop” for investors in Kazakhstan Trusted experts with local knowledge and industry expertise Network of representatives abroad and in all regions of Kazakhstan Unified negotiator

• n behalf of the

Government

www.invest.gov.kz +7 7172 620 620

www.invest.gov.kz +7 7172 620 620

INVESTMENT PROPOSALS More than 100 investment proposals in the priority sectors

Agribusiness Mining and Metallurgy Chemical and Petrochemical Industry Transportation, Logistics and Infrastructure Tourism Others

Nur-Sultan

Almaty Atyrau Shymkent Aktau

Polypropylene «KPI» 500 th. tonns Aromatic Hydrocarbons 630 th.tonns Polyethylene «KLPE» 1,250 mln tonns Polypropylene «Neftehim LTD» 70 th. tonns Lubricants Lukoil 100 th.tonns Base OIl «Hill Corporation» 450 th. tonns Methanol & Olefins WestGasOil Pte. LTD 1,5 mln tonns

Pavlodar

Polyprolene & ETBE ShKH 150 th. tonns Lubricants «Hill Corporation» 30 th. tonns Cycloxane KazhimProduction 150 th. tonns Polyethylene terephtalate «Almex Petrochemical» 430 th.tons Urea UCC 850 th.tonns

Taraz

Urea KazAzot 300 th.tonns

Operating Under Construction Perspective

World Ranking by stocks of raw materials Production 2019

Oil Gas Uranium Coal

Primary electricity of renewables

3.6% of the world's primary energy reserves

15 12 2 8

90,4 million tons Export 72,4% Generation of electricity (renewables) - 2,2% 56,4 bln. m3 Export 34% 115,4 million tons Export 31% 22,7 thousand tons Export 100%

OPPORTUNITIES IN PETROCHEMICAL INDUSTRY

Partner: WestGasoil Location: SEZ Morport Aktau Capacity: 800 tonns of Olefins Investment Amount: 1,8 Bln USD Implementation Stage: Feasibility Study

METHANOL & OLEFINS UREA PRODUCTION (FERTILIZERS) BASE OIIL

Partner: Hill Corporation Location: Turkestan Region Capacity: 255 th tonns Investment Amount: 703 mln USD Implementation Stage: Feasibility Study Partner: KazAzot Location: Mangystau Region Capacity: 300 th tonns Investment Amount: 344 mln USD Implementation Stage: Prefeasibility Study

The government provides support in providing feedstock to strategically important investment projects for the production of petrochemicals with high added value Amendments were made to the Law of the Republic of Kazakhstan "On Gas and Gas Supply" in part: Establishing a commodity gas pricing mechanism for investment projects that use gas as a raw material producing petrochemical products, according to the formula: cost of gas supply plus the minimum rate of marginality for a national operator (7%).

• Corporate income tax – 0%
• Land tax – 0%
• Property tax – 0%
• Social Tax (for 5 years) – 0%
• Exemption from the VAT

Exemption from customs duties for goods

• Imported into the SEZ territory
• Exported* from the SEZ territory to the

Customs Union Non Fiscal Measures

• Free plot of land for the entire period of existence of a SEZ
• Simplified procedure for employment of foreign labor

OPPORTUNITIES IN PETROCHEMICAL INDUSTRY

OPPORTUNITIES IN MACHINERY INDUSTRY

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2017 2000

KAZAKHSTAN EXPORT (*by OECD)

Machinery industry

Machinery imports in 2019 - $23 billion

Machines, equipment, vehicles, devices, etc.

• ther goods

Potential products for localization:

• 1. Electrical equipment
• 2. Oil and gas
• 3. Automotive
• 4. Other machines, equipment

Total: 38 product groups Availability of:

• raw materials
• competencies
• technologies
• steady demand
• logistics opportunities

$12 billion

48% 52%

$11 billion

1

Exploration of new prospective areas, which have not been explored before, or explored to limited extent – New Mining Code unlocks vast opportunities

2

Application of new efficient methods of ore processing and metal producing to the previously explored deposits in order to increase their productivity

3

Development of the deposits in the areas, where new infrastructure has been recently built and developed

4

Development of further conversion of metal processing – the Government of Kazakhstan provides investment preferences to investors (exemption from customs duties, tax holidays, simplified procedure for attracting foreign labor, etc.)

2

Development of deposits for which exploration and mining licenses are already distributed (secondary market) – Kazakh Invest has pipeline of niche projects to offer potential foreign investors

Prospects and opportunities in Mining and metallurgical industry

Kulan-Ketpes ore field (fluor spar, manganese) Nurbay, Besshoky, Sarybulak (copper) Beskempir (pig iron) North Aurtas (barite concentrate) Shoimbay (gold) Tobol (gold) Zhaisan (copper, silver) Belousovskaya (copper, gold, silver, zinc) Aluminum Ferrosilicon production Aidarly (copper) Ferroalloy plant (ferrosilicium) Refractory products plant Besshoky (copper) Bugetkol (nickel) Karamola (manganese) Syrymbet (tin) Drozhilovskoye (molybdenum, tungsten, lithium) Tymlai (pigment titanium dioxide, special grades of steel) Alaigyr (lead) Batalinskoe and Krasnoarmeiskoe (copper) Chumakskaya (iron ore) Ai-Karauul (copper) South Zhaur (tungsten, molybdenum) Mayatas (gold, lead) Maksut (copper) Samarskoe (coking coal) Velikhovskoye (iron ore) Shokpar and Gagarinskoye (gold, silver) Zhesdybassay (copper) Aleksandrovskoye (copper) Ash processing (silica, alumina, iron concentrate) Shevchenkovskoye (nickel) Metallurgical complex (pig iron) Koktenkol (tungsten, molybdenum) Kokbulak (iron ore) Tokhtar (gold) Kogadyr-6 (gold) Gold Silver Copper Rare metals Iron ore

40 niche projects with total

cost of $9.9 bln.

Nickel Other Metal powder production Longitudinally welded pipes production Long products manufacturing at Aktau Foundry Gornostayevskoye (nickel)

INVESTMENT OPPORTUNITIES IN MINING

DEVELOPMENT OF TOKHTAR GOLD DEPOSIT

Project overview: Investment project involves the extraction of gold ore from considerable measured resources at the Tokhtar, South Tokhtar and South-Tokhtar- Barambayev (hereinafter STB) deposits. It also involves developing a mine at the Tokhtar deposit and a new mine at the South Tokhtar deposit. Processing capacity: 450 000 ton / year Product: cathodic gold Initiator: KAML Kazakhstan Holding LLP Location: Kostanay region Project implementation period: 11 years and the possibility of subsurface management license extension Sales market: Kazzinc, Kazakhmysand Tau-Ken Altynstate plant refineries purchase Dore gold and cathode gold Key investment indicators Deposit reserves Tokhtar deposit Astana Almaty

Indicator Unit of measurement On-balance reserves C1 C2 C1 + C2

Gold kg

• 48,385

Content g/ton

• 5.7

Indicator Result

Investment amount, USD thousands 322,034 Project NPV, USD thousands 260,341 IRR 50.3% EBITDA margin 51% Payback period, years 3.3 Discounted payback period, years 3.8

Construction of Cathode Copper Plant (SX-EW)

Project goal: Construction of dump leaching operation and a cathode copper plant with total capacity of 10000 tons per year. Industry: Non-ferrous metallurgy Kazakhstan Party: «Advance Mining Technology» LL, subsidiary of the U.S. company «First Eurasian Mining» International adviser: Wardell Armstrong Total cost of the project: 65 million USD Start of construction: 2020 Commissioning : 2021-2022 Location of the project: Kazakhstan, Karaganda Province, Northern of Balkhash Lake, Aktogay district, 200 km from Balkhash city and 40 km from Balkhash Lake Final product: LME Grade “A” cathode copper Product sales markets: Europe, China, South Korea, UAE, Japan Potential off-takers: Noble Resources, Trafigura, Traxys Project lifetime: available resources support long life operation minimum 14 years (CPR from Wardell Armstrong) Contract duration: 23 years (contract signed between Ministry for Investments and Development of the Republic of Kazakhstan (Competent body) and Advance Mining Technology LLP (Subsurface user) for extraction

• f natural resources from technogenic mineral formations of Sayak group

(Sayak 1, 2, 3, Tastau, Moldybai).

OPPORTUNITIES IN AGRIBUSINESS

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Investment Attractiveness of Kazakhstan’s Agro-Industrial Complex: 1. 210 million hectares of agricultural lands (world ranking #2 by arable land per capita), including 180 million hectares allocated for pastures. 2. Access to world’s major markets (China, Russian Federation, Middle East, and Southeast Asia). 3. Comprehensive support by the Government. Various incentives & subsidies, business-friendly environment, investors’ rights protection. 4. Significant social impact and skilled labor force. 20% of the employed population is engaged in agriculture and food production. 5. Vast opportunities across the subsectors. The five directions have chances for global expansion.

Dairy Fruits and Vegetables Oilseeds Meat Cereals processing

OPPORTUNITIES IN ICT INDUSTRY

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Volume of Kazakhstan’s IT and Telecommunications Market

* In millions of tenge Volume of IT market in ICT Share of IT market in ICT Volume of Telecom market in ICT Share of Telecom market in ICT y y y y y

OPPORTUNITIES IN TOURISM

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Turgen All-Season Mountain Resort

THANK YOU FOR YOUR ATTENTION!

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