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CURRENT STANDINGS OF KAZAKHSTAN’S ECONOMY

%, to the corresponding period of the previous yearSource: Ministry of National Economy of Kazakhstan

Short-term Economic Indicator (2019-2020)


Basic Sectors

Agriculture Industrial Construction Trade Transportand storage

Communication

January-March 2020 January-April 2020

Measures by the Government:

Early quarantine lockdown

Early medical response

Financial assistance to SMEs

Targeted social assistance

Entrepreneurship support

Lower basic interest rate

Comprehensive anti-crisis program

STRATEGIC LOCATION


Routes Distance,кm

Travel time,days

Through Kazakhstan 9-10 ths. 13-15 Trans Siberian route 11-12 ths 18-20The Northern Sea Route 14 -15 ths. 33-35South Sea Route 23 000 ths. 45-60

New state infrastructure program Nurly Zhol with 112 investment projects $13 billion by 2025

ROLE OF KAZAKHSTAN IN THE NEW LAND-SEA CORRIDOR

WHY KAZAKHSTAN?


INVESTOR’S RIGHTS PROTECTION

The Court of the Astana International Financial Centre and International Arbitration Center –the Common Law court system

The specialized judicial board of the Supreme Court and the Court of Nur-Sultan city for investment dispute resolution

Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan

Coordination Council chaired by the Prime Minister

Investment Ombudsman – the Prime Minister of the Republic of Kazakhstan

Council on Improving Investment Climate under the Government


INVESTMENT INCENTIVES

13 Special Economic Zones

24 Industrial Zones

Investment ContractCorporate income tax

Land tax, VAT

Property tax

Customsduties

0%

Land plot

Ready infrastructure on “plug-and-play” basis

Simplified procedure for foreign labour employment


INVESTMENT CLIMATE



FOREIGN DIRECT INVESTMENTS IN KAZAKHSTAN

*In millions of USD

$15,368

$21,367 $20,960

$24,263 $24,115

$5,744

$7,969

$5,935$7,350 $7,272

$2,770$3,418 $3,693

$5,343 $5,548

$1,907$2,702 $2,965 $2,541 $2,246

$834 $975 $1,083 $1,476 $1,678

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2015 2016 2017 2018 2019

VOLUME OF FDI TO KAZAKHSTANTotal FDI Netherlands USA Switzerland China

Top 10 Investor Countries:

Netherlands

USA

Switzerland

China

France

Russia

Belgium

UK

Turkey

Japan

TOTAL: $340 BILLION

MULTINATIONAL INVESTORS IN KAZAKHSTAN


SUPPORT BY KAZAKH INVEST

“One-stop shop”for investors in

Kazakhstan

Trusted expertswith local

knowledge and industry expertise

Network of representativesabroad and in all

regions of Kazakhstan

Unified negotiatoron behalf of the

Government



INVESTMENT PROPOSALS

More than 100 investment proposals in the priority sectors

Agribusiness Mining and Metallurgy

Chemical and Petrochemical

Industry

Transportation, Logistics and Infrastructure

Tourism Others

Nur-Sultan

Almaty

Atyrau

ShymkentAktau

Polypropylene«KPI»

500 th. tonns

Aromatic Hydrocarbons630 th.tonns

Polyethylene«KLPE»

1,250 mln tonns

Polypropylene«Neftehim LTD»

70 th. tonns

LubricantsLukoil

100 th.tonns

Base OIl«Hill Corporation»

450 th. tonns

Methanol & OlefinsWestGasOil Pte. LTD

1,5 mln tonns

Pavlodar

Polyprolene & ETBEShKH

150 th. tonns

Lubricants«Hill Corporation»

30 th. tonns

CycloxaneKazhimProduction

150 th. tonns

Polyethylene terephtalate«Almex Petrochemical»

430 th.tons

UreaUCC

850 th.tonns

Taraz

UreaKazAzot

300 th.tonns

Operating

Under Construction

Perspective

World Rankingby stocks of raw materials

Production2019

Oil

Gas

Uranium

Coal

Primary electricity of renewables

3.6% of the world's primary energy reserves

1512

2

8

90,4 million tonsExport 72,4%

Generation of electricity

(renewables) -2,2%

56,4 bln. m3

Export 34%

115,4 million tonsExport 31%

22,7 thousand tonsExport 100%

OPPORTUNITIES IN PETROCHEMICAL INDUSTRY

Partner: WestGasoilLocation: SEZ Morport AktauCapacity: 800 tonns of OlefinsInvestment Amount: 1,8 Bln USDImplementation Stage: Feasibility Study

METHANOL & OLEFINS UREA PRODUCTION (FERTILIZERS)BASE OIIL

Partner: Hill CorporationLocation: Turkestan RegionCapacity: 255 th tonnsInvestment Amount: 703 mln USDImplementation Stage: Feasibility Study

Partner: KazAzotLocation: Mangystau RegionCapacity: 300 th tonnsInvestment Amount: 344 mln USDImplementation Stage: Prefeasibility Study

The government provides support in providing feedstock to strategically important investment projects for the production of

petrochemicals with high added value

Amendments were made to the Law of the Republic of Kazakhstan "OnGas and Gas Supply" in part:

Establishing a commodity gas pricing mechanism for investment projects thatuse gas as a raw material producing petrochemical products, according to the

formula: cost of gas supply plus the minimum rate of marginality for a national operator (7%).

Corporate income tax – 0% Land tax – 0% Property tax – 0%

Social Tax (for 5 years) – 0% Exemption from the VAT

Exemption from customs duties for goods Imported into the SEZ territory

Exported* from the SEZ territory to the Customs Union

Non Fiscal Measures

Free plot of land for the entire period of existence of a SEZ

Simplified procedure for employment of foreign labor

OPPORTUNITIES IN PETROCHEMICAL INDUSTRY

OPPORTUNITIES IN MACHINERY INDUSTRY


2017

2000KAZAKHSTAN EXPORT (*by OECD) Machinery

industry

Machinery imports in 2019 - $23 billion

Machines, equipment, vehicles,

devices, etc.

other goods

Potential products for localization:1. Electrical equipment

2. Oil and gas3. Automotive

4. Other machines, equipmentTotal: 38 product groups

Availability of:- raw materials- competencies- technologies

- steady demand- logistics opportunities

$12 billion48%

52%

$11 billion

1

Exploration of new prospective areas, which have not been explored before, or explored to limited extent – New Mining Code unlocks vast opportunities

2

Application of new efficient methods of ore processing and metal producing to the previously explored deposits in order to increase their productivity

3

Development of the deposits in the areas, where new infrastructure has been recently built and developed

4Development of further conversion of metal processing – the Government of Kazakhstan provides investment preferences to investors (exemption from customs duties, tax holidays, simplified procedure

for attracting foreign labor, etc.)

2

Development of deposits for which exploration and mining licenses are already distributed (secondary market) – Kazakh Invest has pipeline of niche projects to offer potential foreign investors

Prospects and opportunities in Mining and metallurgical industry

Kulan-Ketpes ore field (fluor spar, manganese)

Nurbay, Besshoky, Sarybulak (copper)

Beskempir (pig iron)

North Aurtas (barite concentrate)

Shoimbay (gold)

Tobol (gold)

Zhaisan (copper, silver)

Belousovskaya (copper, gold, silver, zinc)

Aluminum Ferrosilicon production

Aidarly (copper)

Ferroalloy plant (ferrosilicium)

Refractory products plant

Besshoky (copper)

Bugetkol (nickel)

Karamola (manganese)

Syrymbet (tin)

Drozhilovskoye (molybdenum, tungsten, lithium)

Tymlai (pigment titanium dioxide, special grades of steel)

Alaigyr (lead)

Batalinskoe and Krasnoarmeiskoe(copper)

Chumakskaya (iron ore)

Ai-Karauul (copper)

South Zhaur (tungsten, molybdenum)

Mayatas (gold, lead)

Maksut (copper)

Samarskoe (coking coal)Velikhovskoye (iron ore)

Shokpar and Gagarinskoye (gold, silver)

Zhesdybassay (copper)

Aleksandrovskoye (copper)

Ash processing (silica, alumina, iron concentrate)

Shevchenkovskoye (nickel)

Metallurgical complex (pig iron)

Koktenkol (tungsten, molybdenum)

Kokbulak (iron ore)

Tokhtar (gold)

Kogadyr-6 (gold)

Gold

Silver

CopperRare metals

Iron ore

40 niche projects with total cost of $9.9 bln.

Nickel Other

Metal powder production

Longitudinally welded pipes production

Long products manufacturing at Aktau Foundry

Gornostayevskoye (nickel)

INVESTMENT OPPORTUNITIES IN MINING

DEVELOPMENT OF TOKHTAR GOLD DEPOSIT

Project overview: Investment project involves the extraction of gold ore from considerable measured resources at the Tokhtar, South Tokhtar and South-Tokhtar-Barambayev (hereinafter STB) deposits. It also involves developing a mine at the Tokhtardeposit and a new mine at the South Tokhtar deposit.Processing capacity: 450 000 ton / yearProduct: cathodic goldInitiator: KAML Kazakhstan Holding LLPLocation: Kostanay regionProject implementation period: 11 years and the possibility of subsurface management license extensionSales market: Kazzinc, Kazakhmysand Tau-Ken Altynstate plant refineries purchase Dore gold and cathode gold

Key investment indicators

Deposit reserves

Tokhtar deposit

Astana

Almaty

IndicatorUnit of

measurementOn-balance reserves

C1 C2 C1 + C2

Gold kg - - 48,385

Content g/ton - - 5.7

Indicator Result

Investment amount, USD thousands 322,034

Project NPV, USD thousands 260,341

IRR 50.3%

EBITDA margin 51%

Payback period, years 3.3

Discounted payback period, years 3.8

Construction of Cathode Copper Plant (SX-EW) Project goal: Construction of dump leaching operation and a cathode copperplant with total capacity of 10000 tons per year.Industry: Non-ferrous metallurgyKazakhstan Party: «Advance Mining Technology» LL, subsidiary of the U.S.company «First Eurasian Mining»International adviser: Wardell ArmstrongTotal cost of the project: 65 million USDStart of construction: 2020Commissioning : 2021-2022Location of the project: Kazakhstan, Karaganda Province, Northern ofBalkhash Lake, Aktogay district, 200 km from Balkhash city and 40 km fromBalkhash LakeFinal product: LME Grade “A” cathode copperProduct sales markets: Europe, China, South Korea, UAE, JapanPotential off-takers: Noble Resources, Trafigura, TraxysProject lifetime: available resources support long life operation minimum 14years (CPR from Wardell Armstrong)Contract duration: 23 years (contract signed between Ministry forInvestments and Development of the Republic of Kazakhstan (Competentbody) and Advance Mining Technology LLP (Subsurface user) for extractionof natural resources from technogenic mineral formations of Sayak group(Sayak 1, 2, 3, Tastau, Moldybai).

OPPORTUNITIES IN AGRIBUSINESS


Investment Attractiveness of Kazakhstan’s Agro-Industrial Complex:

1. 210 million hectares of agricultural lands (world ranking #2 by arableland per capita), including 180 million hectares allocated for pastures.

2. Access to world’s major markets (China, Russian Federation, MiddleEast, and Southeast Asia).

3. Comprehensive support by the Government. Various incentives &subsidies, business-friendly environment, investors’ rights protection.

4. Significant social impact and skilled labor force. 20% of the employedpopulation is engaged in agriculture and food production.

5. Vast opportunities across the subsectors. The five directions havechances for global expansion.

Dairy Fruits and Vegetables

Oilseeds MeatCereals processing

OPPORTUNITIES IN ICT INDUSTRY


Volume of Kazakhstan’s IT and Telecommunications Market

* In millions of tenge

Volume of IT market in ICT

Share of IT market in ICT

Volume of Telecom market in ICT

Share of Telecom market in ICT

y y y yy

OPPORTUNITIES IN TOURISM


Turgen All-Season Mountain Resort

THANK YOU FOR YOUR ATTENTION!

www.invest.gov.kz

[email protected]+7(7172)620-571

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+7 7172 620 620 - CERBA