Kazakhstan is set to significantly boost its copper production, with a target of increasing output from 450,000 to 750,000 tons by 2029. This ambitious plan is part of a broader strategy to strengthen the country’s manufacturing sector, highlighted by the development of a new copper smelter in the Abay region.
To support this expansion, the Kazakh government has enacted legislative reforms, enabling the signing of 25 agreements between manufacturing and major mining companies. These agreements are designed to ensure that primary aluminum and copper raw materials are processed domestically. Consequently, aluminum processing volumes surged to 51,000 tons in 2023, marking a 20% increase from 2022 and a 70% rise compared to 2021. The government plans to further elevate aluminum processing to 72,000 tons by 2024.
In addition to copper and aluminum, Kazakhstan is ramping up steel production, aiming to reach 10 million tons. This growth is driven by the expansion of Qarmet and new ventures like Kazakhstal’s special-purpose steel production. Furthermore, ERG, in partnership with BAOWU Steel, is set to begin producing hot briquetted iron in Rudny, ensuring deep processing of iron ore and fulfilling 100% of raw material needs for steelmaking.
The government has implemented measures to improve legislation, reduce administrative barriers, and introduce new incentives to stimulate domestic production across various sectors, including mechanical engineering, petrochemicals, and the automotive industry. By mid-2024, these efforts have paid off, with the manufacturing sector contributing 13.3% to GDP, making it the third-largest sector after mining and trade.
In the mechanical engineering sector, the government is focused on developing the railway cluster, aiming for 50% localization in railway engineering by 2030. In the oil and gas engineering sector, production of components for pumps, compressors, cranes, and valves is being expanded.
Kazakhstan’s automotive industry is advancing toward more complex vehicle assembly, with a goal to increase small-knockdown assembly (CKD) to 50% by 2027. The construction industry is also expected to meet nearly all domestic demand for basic construction materials by 2029, with 170 new projects in the pipeline.
Efforts to improve special economic and industrial zones are ongoing, providing enterprises with better access to infrastructure. Since January 2024, participants in Special Economic Zones (SEZs) have received differentiated benefits based on their investments, encouraging greater investment and development. Additionally, the terms of operation for all SEZs are being unified until 2049, ensuring stable conditions for long-term investments.
To support domestic producers, over 4,000 locally made goods have been exempted from the national regime, prioritizing their purchase in state procurement. In 2023, domestic producers secured 179 long-term contracts and offtake agreements worth KZT 66 billion ($138.4 million), ensuring steady demand for their products.
The government has also identified key projects to create high-value-added clusters in priority manufacturing sectors, including 17 projects in the metallurgical, chemical, petrochemical, and automotive industries. These initiatives aim to enhance raw material processing and foster related industries, contributing to the sustainable growth of Kazakhstan’s economy.
