Kazakhstan Expands Copper Production Amid Legislative Reforms to Boost Manufacturing Industry

Kazakhstan is making significant strides in its copper production, with ambitious plans to increase output from 450,000 to 750,000 tons by 2029. This expansion is part of a broader effort to enhance the country's manufacturing industry, including the implementation of a new copper smelter project in the Abay region.

To support this growth, the Kazakh government has introduced legislative reforms that have facilitated the signing of 25 agreements between manufacturing and large mining companies. These agreements are focused on ensuring the domestic processing of primary aluminum and copper raw materials. As a result, aluminum processing volumes reached 51,000 tons in 2023—a 20% increase from 2022 and a 70% rise from 2021—with further plans to increase processing to 72,000 tons by 2024.

Kazakhstan is also set to expand its steel production to 10 million tons, driven by the expansion of Qarmet and new projects such as the production of special-purpose steel by Kazakhstal. In collaboration with BAOWU Steel, ERG plans to initiate the production of hot briquetted iron in Rudny, ensuring deep processing of iron ore and meeting 100% of the raw material needs for steelmaking.

The government's reforms aim to reduce administrative barriers and introduce new tools to stimulate domestic production across various sectors, including mechanical engineering, petrochemicals, and the automotive industry. By the end of the first half of the year, these efforts have yielded positive results, with the manufacturing sector contributing 13.3% to the GDP, making it the third-largest sector after mining and trade.

In the mechanical engineering sector, the government plans to develop the railway cluster further, aiming for 50% localization in railway engineering by 2030. The oil and gas engineering sector is also set to expand, with plans to increase the production of parts for pumps, compressors, cranes, and valves.

The automotive industry in Kazakhstan is moving towards more complex vehicle assembly, with a commitment to increase the share of small-knockdown assembly (CKD) to 50% by 2027. In the construction industry, domestic manufacturers are expected to meet nearly all market needs for basic construction materials by 2029, with 170 new projects planned.

Additionally, the government is improving the activities of special economic and industrial zones (SEZs) to provide enterprises with better access to infrastructure. Since January 2024, SEZ participants have received differentiated benefits based on the investments made, encouraging greater investment and development.

To support domestic producers, exemptions from the national regime have been established for over 4,000 domestically produced goods, prioritizing their purchase in state procurement. In 2023, domestic producers signed 179 long-term contracts and offtake agreements worth KZT 66 billion ($138.4 million), ensuring steady demand for their products.

The government has also adopted a list of major projects to create high-value-added clusters in priority manufacturing areas, including 17 projects in the metallurgical, chemical, petrochemical, and automotive industries. These initiatives aim to deepen the processing of raw materials and develop related industries, contributing to the sustainable growth of Kazakhstan's economy.