This entire system was created on the basis of a complex of enterprises for the extraction of copper ore and the production of copper, located in the Karaganda region. In Soviet times, this complex served the needs of the military-industrial complex, and now its main client, as we have found out, is the Chinese economy. Until recently, the Kazakhmys corporation was in fact a real monopoly, crushing all copper mining and production in the country. In a 2011 report , it was even named the world’s only copper vertical integrated corporation. At that time, the copper empire included 18 mines, a network of GOKs, copper smelters and four coal-fired power plants. The latter accounted for 20% of all national electricity generation. Three stations served the interests of the corporation itself, and the fourth (Ekibastuz GRES‑1), where the corporation owned half of the stake, worked both for domestic industrial consumers and for export (10% of the generation went to Russia). The corporation’s investment plans were implemented solely by attracting funds from Western investors buying the company’s shares. As a result, this led to the division of the corporation into two parts - rent, which exists due to the exploitation of old assets and available raw materials, and investment, the future of which is connected with the implementation of plans to launch a giant copper deposit in the Russian Far East to supply raw materials to the market of the People’s Republic of China. The main goal of privatization was to create a mechanism capable of generating resource rent for a narrow circle of trusted persons. This explains the transformation of the network of legally independent industrial plants into a single corporate structure, which is a real monopoly of the type of the early twentieth century. The placement of shares of this monopoly on the London Stock Exchange has become a mechanism for the Kazakh elite to legalize the structure created in Kazakhstan and the resource rent extracted with its help. ANTI CORRUPTION HOTLINE September 26, 2021Ĭorporation “Kazakhmys” is both unique and at the same time typical for Kazakhstan history. More precisely, this is the history of the Republic of Kazakhstan, concentrated in one corporation. Its essence is that the legacy of the Soviet industry was privatized in the interests of the country’s political elite, and management was entrusted to a group of nominal owners.
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