Kazakhstan eyes European investment in mining, energy

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One of the world’s largest manufacturing sectors, Germany is among the largest consumers of raw materials and depends heavily on the import of industrial metals and minerals.

A steady supply of rare earths — which are used to manufacture items such as computers, batteries, catalytic converters and solar panels — is high on Germany’s agenda.

Going green

“Access to raw materials is not only dependent on technological possibilities but also on an economic and political framework,” German Economics Minister Philipp Rosler said after the deal was signed. “The agreement with Kazakhstan establishes that framework, which will allow [German and Kazakh] businesses to move forward with contracts.”

For Kazakhstan, Germany’s expertise in metallurgy and green growth make it an attractive partner, which could pave the way for joint initiatives in other sectors like construction, industrial and agricultural engineering, transport and energy efficiency, analysts said.

While in Berlin, Mr. Nazarbayev appealed to industries to “bring German technology and German machines to Kazakhstan,” and work with Kazahks in the chemistry, rare earths, pharmaceuticals, metallurgy and oil and gas sectors.

The Kazakh-German deals were signed just days after Kazakh Foreign Minister Erzhan Kazykhanov revealed on a visit to Washington that his country hopes to sign similar deals with the European Union, which Mrs. Merkel has said Germany would back.

Over the past year, Kazakhstan has renewed economic and trade ties with France, Italy, Great Britain, Austria and Switzerland. In September, Mr. Nazarbayev visited Paris to oversee the signing of agreements on mining, energy and aviation between France and Kazakhstan.

Energy efficiency and environmental sustainability also are becoming increasingly important for Kazakhstan: Mr. Nazarbayev said in Berlin that his nation would adopt a leading role in the promotion of green growth in Central Asia.

The Kazakh Ministry for Industry and New Technology signed a non-legally binding declaration of intent with the German Environment Ministry, promising to deepen cooperation in energy saving, energy efficiency and renewable energy.

In return, the German Environment Ministry has signaled it will support Kazakhstan in creating a national emissions trading scheme modeled on the European one, to be set up this year.

But some observers are not convinced.

“The Kazakh government has hailed plans of developing IT [information technology] and green technologies, but realistically they are likely to continue to focus on the nation’s mineral wealth,” Ms. Gevorgyan said.

For all the talk of diversification, Ms. Gevorgyan said the big deals still are conducted on the state level and little is done to nurture medium-sized businesses that “still face nepotism, corruption and ineffective bureaucracy.”

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