Press Release: Establishment of Molybdenum Production In Kazakhstan

On August 20, 2005 President of the Republic of Kazakhstan Nursultan Nazarbayev visited Stepnogorsk town. In the course of the visit the Head of State had discussions with Moukhtar Dzhakishev, President of Kazatomprom, and Eshmurat Pirmatov, General Director of Stepnogorsk Mining and Chemical Complex (SMCC).

In September 2004 Kazatomprom took over the SMCC’s hydrometallurgical plant, sulphuric acid production, and uranium mine No.1 in Shantobe, as well as their auxiliary facilities on trust management terms. The takeover resulted in quick restart of major production lines and ensured full capacity operations, which provided jobs and paid salary to more than 2900 employees.

Moukhtar Dzhakishev reported to the Head of State of the facility’s current status and development strategy through year 2010.

The Head of States approved the plans on SMCC development and particularly noted the importance of molybdenum production being established in Kazakhstan; he wished the SMCC staff success in implementation of its plans, which will improve the living standards of population in Steptogorsk town.

One sixth of the world explored reserves of molybdenum (249,000 tons) is located in Kazakhstan. Yet, there was no molybdenum production before. Molybdenum is widely used to produce special steel grades and as catalyst in oil-refining industry.

Based on the research by Kazatomprom and SMCC under Mr. Pirmatov’s guidance, a unique technological scheme of obtaining molybdenum oxide was successfully tested at SMCC, and produced its first output of molybdenum oxide to the visit by the Head of State to Stepnogorsk. Laboratory tests proved the product conformity to international quality standards.

The facility will undertake three-month construction of enrichment facility for one million tons of molybdenum ore per year, and installation of commercial scale equipment to produce 1000 tons molybdenum oxide per year starting from 2006.

The molybdenum raw material will be supplied from Shorskoye deposit (21,000 ton reserves) by Molyken LLP joint venture between SMCC/Kazatomprom and British Eurika Mining. In addition, Kyzyltu and Seletinsk copper-molybdenum deposits are deemed to be future raw material feed sources.

In accordance with Kazatomprom program, more than USD$180mln will be invested between 2005 and 2007 in development of the complex to ensure efficient production in the long run.