Kazakhstan in world news

Kazakhmys to buy stake in ENRC By Eric Onstad and Louise Ireland
Reuters
LONDON: Kazakh miner Kazakhmys is due to become the biggest shareholder in its bigger rival ENRC by buying a 7.7 percent stake from the government, boosting the chances of a merger, analysts said.
Kazakhmys said on Tuesday it had no immediate plans to launch a full takeover, but analysts said the stake building raises the game as the rivals jostle for position.
«The probability of the eventual combination of the two companies has clearly been raised following this news, with KAZ’s positioning relative to ENRC improved too,» said Liberium Capital analyst Michael Rawlinson.
The market was expecting Kazakhmys to sell its ENRC stake after a lock-up on the shares expired on Friday. The overhang has helped take 14 percent off its share price since May 19.
Kazakhmys, which ENRC has looked at buying recently, paid for the ENRC stake — which now stands at 22.2 percent by issuing 80.3 million of its shares to the government.
«We view the 7 percent top up is worth more to Kazakhmys than they paid because it takes them to a more influential blocking position without a premium and allows them to take the associate earnings through their income statement,» said Rawlinson.

NO CURRENT BID PLANS
Kazakhmys, the world’s No. 10 copper producer, said it had no plans at the moment to bid for all of ENRC, but hoped to work with its rival.
«There are plenty of options for cooperation open at the moment, but we really need time to explore them,» Chief Executive Oleg Novachuk told a conference call.
He said the government had an interest in spreading its investments between the nation’s two major mining groups.
«With this investment, the government of Kazakhstan has diversified their investments across the two major listed Kazakh resource companies.»
With the move, the government got a 15 percent stake in Kazakhmys and cut its stake in ENRC to 11.7 percent.
Analysts have said that the government eventually would like to create a national champion mining group that could expand in the region and abroad, but Novachuk declined to comment on this possible scenario.
ENRC is the world’s No. 1 producer of ferrochrome and a major exporter of iron ore with a market capitalisation of $33.l7 billion (16.9 billion pounds), more than twice that of Kazakhmys at $14.6 billion.
ENRC, which floated on the London stock exchange in December, said on March 12 it was considering a takeover of its rival, but failed to submit any offer until last month when it made a non-binding proposal.
Kazakhmys rejected ENRC’s 7.05 billion pound approach, which later said it had decided not to launch a formal bid.

Kazakh government acquires stake in metals giant Kazakhmys
The Associated Press
АLMATY, Kazakhstan: The Kazakh government has become a major stake-holder in the mineral-rich country’s two biggest metal companies after a share swap deal, the Prime Minister’s office said Tuesday.
The government exchanged a 7.7-percent stake in European Natural Resources Corporation for 15 percent of the shares in Kazakhmys Plc, the announcement said. The government retains 11.7 percent of ENRC’s shares.
Kazakhstan has said it wishes to see the two companies develop as strong and independent metal producers, but Tuesday’s move indicates it seeking a greater role in managing the country’s mineral resources.
Acquisition of shares in Kazakhmys will intensify the government’s role in the metals sector and allow it to diversify its mining portfolio, the government said in a statement.
But analysts said Kazakhstan is unlikely to follow the government of neighboring Russia and seize control over swathes of the resource sector.
«Kazakhstan is and will always be more open to foreign investment than its northern neighbor. It is just going from a point of very little control of the resource sector to increased control,» said Michael Carter, head of research at Almaty-based Visor Capital investment bank. He said the level of state control in Kazakhstan is «still relatively mild» compared to many countries.
The announcement is also an apparent reversal of fate for Kazakhmys, which was being targeted for possible acquisition by ENRC. A US$13.8 billion (€8.74 billion) takeover offer last month was turned down by Kazakhmys.
Kazakhmys now owns a 22.2 percent stake in ENRC, making it the largest shareholder in the company. It said it has no plans to make a bid to buy all of ENRC.
Kazakhmys, controlled by former communist party official Vladimir Kim, had revenues of $5.3 billion (€3.4 billion) and $1.4 billion (€900 million) in net income last year, according to a company report.

Kazakhstan holds exercise to hone response to nuclear terrorism threat
The Associated Press
АLATAU, Kazakhstan: Kazakhstan’s army held a large-scale military exercise Friday as part of a U.S.-backed program to prevent the use of radioactive materials by terrorists.
More than 900 troops and emergency personnel took part in organizing the mock terrorist siege at a nuclear research facility near the Central Asian country’s largest city, Almaty.
The presidents of the U.S. and Russia jointly endorsed the Global Initiative to Combat Nuclear Terrorism during a summit in 2006. Kazakhstan volunteered last year to hold the first anti-nuclear terrorism exercise under the initiative.
In Friday’s simulation, an armed group threatened to detonate a nuclear reactor on the site of the research facility unless their demands were met. A brief round of negotiations was followed by a dramatic raid of the building lasting just a few seconds.
The siege was a chance to help create efficient lines of communication between different branches of Kazakhstan’s armed forces and the emergency services, said Adil Shayakhmetov, head of the security service’s anti-terrorism unit.
Kazakhstan has never been a victim of any terrorist attacks, but the government is eager to show the country’s credentials as a reliable security partner. It has previously engaged in numerous joint anti-terrorism exercises, including with NATO, China and the Collective Security Treaty Organization, a security bloc comprised of seven former Soviet states.

Radio station says Kazakhstan blocking website
Reuters
Maria Golovnina
АLMATY: Prague-based Radio Free Europe/Radio Liberty has accused Kazakhstan of blocking access to its website which it said was deliberate interference in its news reporting.
Media watchdogs have long criticized the Central Asian state of silencing independent media in a country where mainstream television and newspapers almost never criticize state policies.
RFE/RL said its Kazakh site had been blocked since April 11 due to what it initially thought was technical problems.
«This is very disturbing,» RFE/RL President Jeffrey Gedmin said in a statement late on Tuesday.
«We initially thought we had a technical problem on our hands, but the Kazakh government’s refusal to respond to us, after many requests, suggests that it’s a case of deliberate interference.»
RFE/RL said its Kazakh-language website, www.azattyq.org, has been blocked along with the English-language page. Kazakh officials could not be immediately reached for comment.
Kazakhstan’s fragmented opposition, as well as human rights groups, have accused President Nursultan Nazarbayev of tightening his grip on power over past years and turning the local press into an obedient mouth-piece.
Most liberal-minded Kazakhs have turned to the Internet as their last venue for political debate, but a number of opposition news websites remain shut for local users. The government has not made any public remarks on this.
The same blocking technique was used in 2006 on www.borat.kz, a website run by British comedian Sacha Baron Cohen who angered Kazakhstan through his alter ego Borat, a racist, sexist and boorish Kazakh TV journalist.

Kazakhstan sees new Kashagan deal by June 30
REUTERS
АLMATY, Kazakhstan: A lawmaker in Kazakhstan has proposed renaming the capital to Nursultan after the president who has ruled the country since the collapse of the Soviet Union.
Lawmaker Sat Tokpakbayev says the gesture would honor President Nursultan Nazarbayev’s efforts in promoting the city.
The capital was moved in 1997 from Almaty to barren northeastern Kazakhstan. The move transformed the backwater city of Akmola into Astana, a showplace of gleaming modernist buildings and monuments.
Tokpakbayev’s spokeswoman said Wednesday that most deputies support the proposal to change Astana’s name to Nursultan. Kazakhstan is in talks with a group of Western oil majors over the cost structure of the giant Kashagan oilfield and hopes to clinch the final deal by the end of this month, Energy Minister Sauat Mynbayev said on Monday.
Kazakhstan and the consortium have been locked in a standoff over cost overruns and production delays at Kashagan since August 2007. Under a tentative January deal, costs were fixed at $136 billion, up from the previous $57 billion estimate.
«Talks are under way,» he told reporters. «I think, I hope, they will be over by June 30.»
Mynbayev said the government specifically disagreed with a draft budget the Kashagan partners submitted to the government last month. «We are now discussing our objections,» he said.
Mynbayev said discussions also involved the timeframe for the start of commercial production at the biggest oil discovery in the last 30 years, currently slated for 2011.
«If (a delay) does happen, it would lead to many other things. All those other things are being discussed now,» he said without elaborating.
Kazakhstan threatened last month to slap sanctions on the consortium should its operators decide to delay the start of production again.

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