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Delegates divided over Kazakhstan's draft mining code at Astana forum

Kazakhstan's draft mining code dominated discussion on the first day of the eighth Central Asian Mining and Exploration Forum in the country's capital city Astana on April 19. The new legislation, which seeks to overhaul the country's outdated mining code and attract foreign investment, divided opinion amid criticism it was not sufficiently concise and did not fully guarantee the rights of subsoil users.

Timur Toktabayev, the vice minister for investments and development, the department in charge of drafting the code, championed the document, saying that it would boost the mining industry and create a safe environment for foreign investors.

Toktabayev said the draft code is expected to be approved by the government later this year. According to the Ministry for Investments and Development, the legislation is intended to imitate the Australian model for subsoil use by simplifying licensing processes, following the principle of first-come-first-served. The draft document also aligns the Kazakh system of resource evaluation with international standards, and provides better access to geological data and contract guarantees for current investors.

Mining consultancy Wardell Armstrong International's Managing Director Phil Newall said that currently there was "little exploration taking place and very little speculative money coming into Kazakhstan", but there was new interest in copper and gold deposits in the country.

"The new mining code will help when it comes into effect later this year, but it is not going to make an immediate impact," said Newall. "It will take time for that code to sink in to the global exploration market place."

Although the new code is a move in the right direction, Galina Baymahanova, a member of Kazakhstan's parliament and Secretary of the Committee on Ecology and Nature Management, said the legislation needed fine-tuning because, as it stands, the document contains too many gray areas.

She went on to say that all of the specialized terminology in the document needed to be revised as, in many cases, it is not properly defined. Baymahanova also said the rights of subsoil users needed to be properly guaranteed in the new code before it was passed.

"The guarantees of the rights of subsoil users are overly simplified in the code," she said during a roundtable discussion, adding that this was something that needed to be addressed in order to attract foreign investment.

"The state should welcome investors and guarantee their rights, whilst at the same time upholding national interests," said Baymahanova.

David Oberhuber, program director at the German International Cooperation, a consultancy focused on sustainable development, said that although changes to the draft code were necessary, the top priority was to get this new legislation into action.

"This is a big step for Kazakhstan and for national and international investment here in the country," he said.