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INTERVIEW-UPDATE 1-Kazakhstan to toughen ecology laws for miners

Published 03/30/2011, 06:56 AM
Updated 03/30/2011, 07:00 AM
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* Tougher laws on waste could be ready by year-end

* Laws ordered by president could affect major miners

* Kazakh state will not use laws to pursue mining stakes

(Adds details, quotes, background)

By Raushan Nurshayeva

ASTANA, March 30 (Reuters) - Kazakhstan will toughen laws to reduce waste in its key mining sector, the country's environment minister said, in a move that will require some of the world's leading metals miners to spend more on treating their waste.

Environmental Protection Minister Nurgali Ashimov told Reuters the stricter laws, ordered personally by President Nursultan Nazarbayev, would give mining firms between two and three years to work out and finance waste utilisation plans.

"We have shifted the emphasis in our ecological policy," Ashimov said in an interview.

"Collecting fines is not the most important task," he said. "Our task is to ensure that Kazakhstan's enterprises inflict as little ecological damage to the nation as possible."

Kazakhstan, a vast Central Asian nation five times the size of France populated by only 16.4 million people, boasts giant reserves of oil, gas and industrial metals.

The world's ninth-largest country has stockpiled 22 billion tonnes of industrial waste, and every year adds another 600 million tonnes of tailings, Ashimov said.

Under current legislation, it is much more profitable for companies to pay fines on their tailings than to utilise them by investing in new technology and equipment, the minister said.

"If the proposed amendments are adopted, metallurgical companies' spending on the utilisation of waste is set to rise," he said. "This will have an impact on all companies that have mine tailings, in particular on Kazakhmys, Kazzinc and ENRC."

Kazakhmys is the world's 10th-largest copper miner, while Eurasian Natural Resources Corp is the world's largest ferrochrome producer and a major producer of iron ore, alumina and aluminium. Both companies are listed in London.

Glencore-controlled Kazzinc, formed in 1997 by the merger of three lead and zinc plants, is the largest zinc producer in the former Soviet Union. It also mines precious metals and copper.

Ashimov said that, under the changes now being debated in the lower chamber of parliament, mining firms that implement new programmes to utilise waste would be exempt from fines currently payable on the new tailings created by their mines every year.

But he said those companies that fail to meet their obligations would face fines on the entire volume of waste amassed, which at some enterprises runs into tens of millions of tonnes. Miners now pay fines only on newly generated waste.

He did not specify the size of the current or future fines.

'STOP WHINGING!'

Ashimov said metals producers had given a largely hostile reception to the proposed amendments, which could be signed into law by the end of this year.

There is little doubt that a parliament comprised exclusively of members of the president's ruling party will approve the legislative changes.

Nazarbayev, a 70-year-old former steelworker who has ruled Kazakhstan since Soviet times, is set to easily win another five years in office in an early presidential election on Sunday.

"Large metallurgical companies are not happy. They have started whinging that their capitalisation will fall," Ashimov said, without naming individual companies.

"Our arguments are: you have time to prepare a utilisation programme and then, if you undertake to process it all in 10 years, you pay zero," Ashimov said. "But if you start playing tricks, pay in full. We are not setting unrealistic conditions."

Ashimov denied widespread speculation that the authorities were using his ministry as a "battering ram" to assert Kazakhstan's interests in rows with foreign investors and raise the share of the state in lucrative oil and mining projects.

"We can't be the battering ram of the government. We have only 90 staff workers in the ministry. We are too small ... We are more like a pen-knife," he said.

"We make no difference between Kazakh companies and foreign ones. The ecological code is for one and all." (Writing by Dmitry Solovyov; Editing by Robin Paxton)

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