Unequipped money

The introduction of innovations by subsurface users in Kazakhstan is not so much a matter of introducing high technologies as of mutual monetary concessions. Who is demanding benefits for what and from whom, "K" found out.

The presentation of mining equipment from BASF, Endress+Hauser, Reflex, FLSmidth-Essa and Fordia was marked by the government's innovation policy. The business seminar was called "Kazakhstan – Europe. Advanced technologies and innovative solutions for the mining industry."

In addition to the presentation purposes themselves, the meeting participants raised the issue of financial accessibility of equipment offered by European, Canadian and Australian companies. Judging by the persistence with which they returned to him, this issue has not yet been resolved and there is no consensus on this issue yet.

For example, Gulzhan Kudaikulova, director of Burmash LLP, said that the equipment in the Kazakh market is very expensive.: "This is a deterrent to using foreign tools."

According to her, the American Boart Longyear has become the market leader in drilling tools, whose drill bits, in particular, are cheaper than the products of the Canadian Fordia. But even they don't always have the money, so the company is forced to buy cheaper and lower-quality Kazakh and Chinese counterparts.

"Of course, we would like to use crowns that can withstand 300-400 m. But the money for drilling allocated by companies is not large enough to buy expensive equipment. Therefore, we urge our partners to think about pricing policy," summed up Ms. Kudaikulova.

Manufacturers reacted cautiously to her call. "We are ready to supply tools with a drilling depth of up to 2 thousand meters to Kazakhstan. Their price is reasonable, but high. We cannot charge a low price for modern technological equipment," said Gabriel Allen, Vice President of Fordia.

According to Abdurasul Zharmenov, General Director of the National Center for Integrated Processing of Mineral Raw Materials of the Republic of Kazakhstan (NC KPMS RK), not manufacturers, but financial institutions, which, in particular, provide leasing services, should make concessions.

"The financial system in the Republic of Kazakhstan is not adapted to the needs of producers. Banks provide leasing at high interest rates and for short periods that are not comparable to the production cycle. Banks require guarantees, which leads to a doubling of the cost of financing. Money for drilling equipment should be cheap. Otherwise, companies are forced to buy it from their own funds," explained Mr. Zharmenov.

Meanwhile, according to analysts, the state should give up the money. "Currently, exploration companies (GRCs) pay the same taxes as mining companies. And the risks of geological explorers are higher because they don't have a product, by and large, they only extract information. Given the exploration risks, it is not profitable for them to spend money on drilling. If the government had given tax incentives, then the GRK would have had the funds to order additional drilling volumes to drilling companies. And they, in turn, by increasing the volume of work and the number of customers, would receive money to finance high–quality equipment," said the analyst at SRC – Consulting (an independent international consulting company specializing in the mining industry and the water resources sector. – "K") Sergey Volkov.

The state is already ready to provide benefits, but not just like that, but in exchange for those very innovations: head of the Ministry of Industry and New Technologies (MINT) Asset Issekeshev stated that when the results of research and development work are implemented, the amount of taxable income for subsurface users will decrease by 50%.

According to market participants, such a reduction in the tax burden should stimulate innovation.

However, the purchase of high-quality equipment by itself will not be recognized as an innovation for which the state is ready to reduce taxes by half. "Our center is authorized to conduct expert examinations. To call a particular technology innovative, we will look at how much the level of extraction of a useful substance will increase compared to the existing one, and how the cost level will decrease. We absolutely do not need outdated know-how to be imported here," Mr. Zharmenov said.

Source: www.kursiv.kz