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Assessing economic sustainability of mining in Kazakhstan

Author

Listed:
  • Zauresh Atakhanova

    (Nazarbayev University)

  • Seribolat Azhibay

    (Nazarbayev University)

Abstract

Kazakhstan is a leading producer of uranium and chromium and has significant reserves of critical raw materials. We assess economic sustainability of Kazakhstan’s mining, focusing on its labor productivity, a key factor in counteracting the effects of resource depletion and increasing costs. We find that during 2000–2021, labor productivity continued improving in mining of non-ferrous metals and industrial minerals. Our firm-level analysis demonstrates that domestic non-ferrous mining firms were able to achieve productivity level comparable to that of modern mining industries. They reduced energy intensity, increased efficiency of processing plants, and accessed higher-quality reserves. In addition, managerial innovations, engaging with the workforce, and introduction of advanced technologies were prominent in analyzed firms. However, following a period of rapid growth during the early 2000s, productivity stagnated in Kazakhstan’s coal mining while it decreased in iron ore mining. We relate such performance to iron ore depletion from underinvestment in exploration. In coal mining, stagnating productivity reflects this sector’s protected status and substantial fossil fuel subsidies.

Suggested Citation

  • Zauresh Atakhanova & Seribolat Azhibay, 2023. "Assessing economic sustainability of mining in Kazakhstan," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(4), pages 719-731, December.
    • Handle: RePEc:spr:minecn:v:36:y:2023:i:4:d:10.1007_s13563-023-00387-x
    DOI: 10.1007/s13563-023-00387-x
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy intensity; Depletion; Copper mining; Panel data analysis;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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