No 1 January 14, 2008
•Kazakhstan’s Finance Ministry to unveil the actual economic situation in Kazakhstan to international rating agencies •Seventh annual Eurasian Media Forum announced •Kazakhstan has taken a further step toward abolishing capital punishment
•Kazakhstan to Increase Uranium Output Fivefold, Overtake Canada (Bloomberg) •London Stock Exchange welcomed Eurasian Natural Resources Corporation PLC to the Main Market on 12 December 2007 •Fitch Ratings is to hold a Conference on Kazakhstan in the context of global liquidity crisis: risks and ways for resistance
•The Breakthrough of Kazakh Aviation
Kazakhstan’s Finance Ministry to unveil the actual economic situation in Kazakhstan to international rating agencies
In the Q1 2008 the Kazakhstan’s Finance Ministry is poised to expound the actual economic situation in Kazakhstan to the international rating agencies, Vice Finance Minister Daulet Ergozhin announced at the round-table discussion on investment funds and raising of the finance awareness of the populace.
“With regards to Kazakhstan, I believe the downgrading is not quite substantiated. I assume this was somewhat a panic-driven decision on the part of the rating agencies. I believe they might reconsider the ratings after we have shed the light on the situation. And we will get back to our regular position”, he said.
“Given a certain misunderstanding, we intend to hold a number of meetings in the Q1 with reps of the rating agencies and current investors to our economy so that to expound the general situation to them”, D. Ergozhin said.
“Downgrading is normally preceded by defaults, falling of budget revenues or some crisis-like events. While we, contrariwise, have outstripped the budget revenues targets, growth of revenues have been stable and we intend to maintain the same level of growth as was planned for the current year”, the Vice Minister said.
Seventh annual Eurasian Media Forum announced
The annual Eurasian Media Forum will take place this year in Almaty, Kazakhstan from April 24-26. The purpose of the forum is to determine Eurasia’s strategic role in world affairs and how this factors into news coverage. Topics discussed at this year’s forum include international relations, access to information and how to achieve quality journalism. Registration will take place at the event itself.
The chair of this year’s conference is Riz Khan, TV host and producer of Al Jazeera International, USA. Other speakers include members of organizations such as the Asia Society and the American Enterprise Institute and journalists from media outlets such as CNN and the BBC.
Kazakhstan has taken a further step toward abolishing capital punishment
Kazakhstan has taken a further step toward abolishing death penalty. In addition to a moratorium on death penalty introduced in December of 2003, Kazakhstan has introduced life imprisonment as an alternative to the death sentence for some grave crimes.
The UN accepted resolution on death penalty moratorium by majority of votes in the third committee in November 2007. The resolution of the General Assembly has no binding force, but is a political signal for leaders of the world. The document has been introduced on behalf of almost 80 states and called the countries to refuse application of death penalty, which contradicts the basic principles of the United Nations.
In accordance with the Constitution of the Republic of Kazakhstan, amended in May 2007, the death penalty may be imposed as an exceptional sanction, such as those committed in wartime and terrorism. Meanwhile the accused has the right to appeal.
There are currently 31 persons in Kazakhstan who enjoyed life imprisonment as an alternative to the death penalty.
Kazakhstan to Increase Uranium Output Fivefold, Overtake Canada (Bloomberg)
Kazakhstan, the world's third-biggest uranium producer, plans to increase output fivefold within a decade and overtake Canada as the largest supplier of nuclear fuel.
Kazakhstan intends to mine 30,000 metric tons a year by 2018, Mukhtar Dzhakishev, President of state-run producer “Kazatomprom”, said in an e-mailed response to questions on Jan. 8. Kazakhstan extracted 5,279 tons in 2006, about 4,600 tons less than Canada, according to the World Nuclear Association in London.
“It's important for Kazakhstan to get the maximum stake in the nuclear fuel market”, Dzhakishev, 44, said from Almaty. “The price of uranium will definitely continue to rise because of the excessive demand. The shortage of uranium will reach a critical level in 2014”.
Record oil and coal prices, combined with the threat of global warming, spurred demand for nuclear power and uranium to fuel reactors. Uranium rose to a record $138 a pound in June, compared with $6.75 as recently as 2001, as rising consumption forced manufacturers to recycle nuclear warheads to meet demand.
Power companies are building 30 nuclear generators, planning another 74 and have proposals for a further 182, in addition to the existing 437 plants, Lehman Brothers Holdings Inc. said in a report in June.
Disruption at mines run by Saskatoon, Saskatchewan-based Cameco Corp. caused last year's rally to accelerate. Cameco, the world's biggest uranium mining company, Paris-based Areva SA and Japan's Kansai Electric Power Co. are among foreign firms operating in Kazakhstan.
Kazatomprom has yet to determine its expansion cost, Dzhakishev said.
The company plans to save money by mixing hydrogen peroxide with sulfuric acid to extract metal from ore. Kazatomprom now uses only acid, which can represent as much as a fifth of mining costs, according to the World Nuclear Association, which represents power generators.
Uranium One Inc., the Toronto-based developer of a Kazakh uranium mine, cut its production target for 2008 by 38 percent in October because of a shortage of sulfuric acid. Uranium mining in the country requires as much as 80 kilograms of acid to extract 1 kilogram (2.2 pounds) of metal, according to the WNA.
Kazatomprom wants to expand in the nuclear industry, including enrichment, he said. The company will seek money internationally to pay for building an enrichment plant in Russia by 2012, Dzhakishev said.
London Stock Exchange welcomed Eurasian Natural Resources Corporation PLC to the Main Market on 12 December 2007.
Eurasian Natural Resources Corporation PLC is a leading diversified natural resources group with integrated mining, processing, energy, logistical, and marketing operations. It is the world’s largest producer of ferrochrome, based on chrome content, the world’s sixth largest iron ore exporter by volume and world’s fifth largest supplier of traded alumina by volume.
The government of Kazakhstan is ENRC’s biggest shareholder with a 24.8 per cent stake. Kazakhmys, the Kazakhstan-based, London-listed copper miner, owns 18.8 per cent. The rest is owned by three businessmen who founded the company: Patokh Chodiev, Alijan Ibragimov and Alexander Mashkevitch.
The global offer comprised a primary offer of ordinary shares to institutional investors. The global offer was of 277,750,000 new shares, following the exercise of the over-allotment arrangements, and on admission the free float represents circa 22.1% of the issued ordinary share capital. The gross proceeds of the offer were £1.5 billion. Based on the offer price of 540p, the market capitalisation of the Group on admission was approximately £7 billion.
The proceeds from the capital raising will primarily be used to fund the Group's investment programme as well as reducing leverage and funding future acquisition opportunities.
Dr. Johannes Sittard, ENRC’s Chief Executive Officer, said: "We are delighted to have successfully listed our shares in London, especially at this time, and look forward to life as a public company. We are pleased to be able to share our growth not just with our employees and customers, but now with our shareholders too."
Deutsche Bank acted as Sole Global Coordinator, Sole Sponsor and Joint Bookrunner. ABN AMRO Rothschild, Credit Suisse, and Morgan Stanley acted as Joint Bookrunners. Other advisers included M:Communications (PR/IR), PricewaterhouseCoopers (reporting accountants), and the legal advisors were Denton Wilde Sapt, Jones Day, Cleary Gottlieb Steen & Hamilton LLP, De Brauw Blackstone Westbroek, Niederer Kraft & Frey and GRATA.
Fitch Ratings, the international rating agency, is to hold a Conference on Kazakhstan in the context of global liquidity crisis: risks and ways for resistance
Fitch Ratings is to hold a Conference on Kazakhstan in the context of global liquidity crisis: risks and ways for resistance in Almaty, Kazakhstan on 12 February 2008.
Fitch second major event for Kazakhstan market will bring together key figures from the Kazakh authorities, largest Kazakh companies, banks, regions and municipalities, representatives of international financial organizations and investment community, and leading Fitch analysts specializing in sovereign, banking, corporate and international public finance sectors.
The full day conference program will consist of three main parts:
- Overview of macroeconomic environment in Kazakhstan. Sovereign credit quality: risks and challenges;
- Impact of the global liquidity crisis on credit quality of corporate issuers and their ability to raise debt finance;
- Kazakh banking sector: asset quality and liquidity as key factors for financial system stability.
Advance registration is required for participation, admission is free of charge. As the number of delegate places is limited, it is strongly encouraged to register in advance. To register, please contact Marina Moshkina at FitchRatings by e-mail email@example.com or by fax +7.495.956.9909, by 6 February 2008.
The Breakthrough of Kazakh Aviation
The Board of Directors of JSC Air Astana representing the shareholders Samruk State Holding and BAE Systems PLC have agreed to sign a Letter of Intent (LOI) for the firm order of 6 Airbus A320 family and 3 Boeing 787-8 aircraft powered by Rolls Royce Trent 1000 engines.
In addition to the firm order, the Board has agreed for the company to place 3 options for Airbus A320 and 3 purchase rights for Boeing 787-8 aircraft.
The total value of the orders at manufacturers’ list price represents USD 950 million for the firm orders and USD 736 million for the options and purchase rights. Delivery of the aircraft will start from 2012.
Peter Foster, President of Air Astana said “This order represents Air Astana’s first order to purchase its own aircraft, consistent with its Strategic Business Plan which will see the fleet expanding from 18 aircraft at present to 63 aircraft in 2022. Air Astana is happy to make this announcement in celebration of the Independence Day of the Republic of Kazakhstan”.
Air Astana is a joint venture between the Samruk State Holding and the British BAE Systems, with the equity share of 51% and 49% correspondingly. Currently, the Air Astana fleet consists of Western aircraft, including B767-300, В757-200, А321, А320, and F50. Air Astana was founded in September 2001 and commenced flying in May 2002. It presently operates on 25 domestic routes within Kazakhstan, and 21 international routes from its hubs of Almaty, Astana and Atyrau. It is one of the world’s fastest growing airlines.
Moreover Air Astana has signed in November 2007 an Agreement with Lufhansa enabling card holders of its (LH) ‘Miles & More’ frequent flyer programme to accrue mileage on designated Air Astana flights and routes. The agreement extends to partnership airlines using ‘Miles & More’ branded cards including Austrian, LOT and Swiss, and is active with immediate effect.
News Bulletin of the Embassy of the Republic of Kazakhstan
Contact person: Zhanbolat Ussenov
Tel.: 202-232-5488 ext 104; Fax: 202-232-5845