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Library of Congress – Federal Research Division

Country Profile: Kazakhstan, December 2006

Fergana Valley. Kazakhstan produces a small amount of timber for export, but imports of timber products far outnumber exports. In 2004 a total of 300,000 cubic meters of wood were harvested, the majority of which was used as fuel.

The desiccation of the Aral Sea ruined a prosperous fishing and fish-processing industry. In the Caspian Sea, stocks of sturgeon and other fish have been depleted sharply by pollution, poaching, and overfishing. Kazakhstan has developed some sturgeon farms to replace the wild stock. In 2003 the total catch was 23,100 tons.

Mining and Minerals: Kazakhstan has rich deposits of chromium, coal, copper, gold, iron ore, tungsten, uranium, vanadium, and zinc. Coal mining, which has declined sharply in the post- Soviet era, is centered in the north-central Karaganda (Qaraghandy) Province, and copper mining, which has received substantial South Korean and British investment, is centered in Dzhezkazgan (Zhezqazghan) Province directly south of Karaganda. Phosphates are mined in Dzhambul (Zhambyl) and Chimkent (Shymkent) provinces along the southern border. Gold deposits in the northern provinces and at Zhambyl have not been fully exploited. Uranium extraction is expected to increase significantly between 2006 and 2112, making Kazakhstan a world leader in that mineral.

Industry and Manufacturing: Kazakhstan’s industries are concentrated in the northern and northeastern provinces. In the first five years of the 1990s, the production of Kazakhstan’s industrial sector fell by 52 percent compared with the last years of the Soviet era. The defense industry, which made a significant contribution to the Soviet system, virtually disappeared. Beginning in 2000, increased oil output stimulated industrial growth, although growth in other industries remained flat. Aside from oil-related activity, the main industries are metals processing, machine building, and the manufacture of construction materials. Substantial foreign investment has bolstered the metallurgy industries, and privatization has revived some enterprises. Since 2000 the construction industry has been stimulated by the need for new oil and gas infrastructure and the building of a new capital city at Astana. The most important light industrial products have been beer, cigarettes, and wheat flour.

Energy: The government maintains a virtual monopoly over energy industries. Despite its fossil fuel riches, Kazakhstan is a net importer of electricity, mainly from Russia. A major cause of the energy imbalance is an extremely high ratio of energy consumption to gross domestic product output. Reversal of energy dependency is a high priority of government economic policy. In the first half of 2006, electric power consumption increased by 4.3 percent over the same period of 2005, totaling 35.9 billion kilowatt-hours; in that period, production increased by 5.8 percent to 36.6 billion-kilowatt hours. Electricity imports from Russia (73 percent of the total) and Kyrgyzstan (27 percent) decreased by 39 percent between the first half of 2005 and 2006

Between 1996 and 2005, the share of thermoelectric generation declined steadily, and the share of hydroelectric generation increased, reaching 12 percent in 2005. Kazakhstan has no operating nuclear power plants. Dependence on foreign suppliers has motivated a long-term plan to build 20 new generating plants, mainly hydroelectric, by 2015. The first such plant, Moinak on the Charyn River, would open in 2010. Other plants will go on the Chu, Ili, Irtysh, Syr Darya, and Talas rivers. With international assistance, the power distribution grid began a large-scale

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