The head of the Committee of Mining and Metallurgical Industry NCE RK "Atameken" is against "streamlining" of the coal industry

At the National Chamber of Entrepreneurs of Kazakhstan "Atameken" was held a meeting of the mining and metallurgical industry of the Presidium of NCE RK. Head of the Committee expressed its opinion on the review of voluntary prior sale of coal through the stock exchange. "There is nowhere in the world the mandatory sale of coal through the stock exchange. Why coal miners who extract the coal with their hands, plunging to the depths, are forced to go to intermediaries, to give brokers percentage for the sale of coal? In accordance with the recommendation of the OECD, stock exchange – is a voluntary marketplace. And coal miners will always start to sell through it, if it is profitable. But why only Kazakhstan has forced sale of more than 3 thousand tons of coal per batch through the stock exchange? We must understand that it is necessary to raise the income of coal miners and to reduce the price of coal. Therefore, first of all, it is necessary to remove intermediaries. And we put the question to the Ministry of National Economy: the stock exchange should function on a voluntary basis, no one should force coal miners to go to the stock exchange", - he said.

According to Radostovets, there is enough coal in the country, there is fierce competition between the companies. "Consumers may ultimately get a lower price if it will be sold freely. And now this barrier", - he added.

The head of the Committee also stressed that Kazakhstan's coal is in demand in other countries. "We sell well the coal. Now we export it to Japan, even, we could sell it even to Poland. The demand for coal is there, so you need to fully support the coal industry, not to say that it must be streamlined", - said Radostovets.

The expert also believes that Kazakhstan needs to revise approaches to green energy. "If we talk about the price drop, this should also apply to green technologies. Now there is a decision of the Government that 1 kW / h of electric power of solar panels is 71 tenge. How to look at coal miners’ eyes when there is 10 fold increase? Do we do it for the sake of fashion? How can a real business function normally, if the prices for renewable energy sources won’t be reduced? We need to find a compromise on this issue", - he concluded.

The President of JSC "Center for development and protection of competition policy" Aldashev Aitzhanov spoke at a meeting with the question of the establishment of coal prices in the range of inflation without recognition of them as exclusively high. For example, he noted that the method of identifying monopolistically high prices today is not perfect. "In practice, it turns out that any increase in prices gives reason to initiate an investigation. As a result, we get a lot of trials, some of which are - baseless", - he said.

According to Aytzhanov, it is now considered the norm on the introduction of anti-trust Compliance, which can be both at the company level and at the level of the industry. "This is some kind of industry act, which will stipulate the basic principles of relations between themselves and with the competition authority. There can be prescribed rules, in which cases the price increase would not be considered illegal, what costs will be included as justified, etc.", - he explained.

On the import substitution in the mining industry spoke the Managing Director, the head of the department of basic industries NCE RK Evgeni Bolgert. According to him, the Government and the Ministry of National Economy render support in this regard, there has been created a working group. "The analytical stage is on now to identify positions that would be economically feasible to translate into import substitution. In this regard, the experience of Russia is important for us. In Russia, there were developed and adopted 19 sectoral plans for each sector, which set specific parameters and terms of by when it is necessary to reduce the share of imports of a particular heading. We offer approximately the same algorithm. Now they identify by industry specific headings that have the potential at the domestic market. They identify barriers because of which these headings are not purchased today by our state bodies and national companies", - he said.

Evgeni Bolgert noted that today a package of state support measures is being formed, which do not consider import substitution as a measure. In general, it is export orientation. "But we offer together with export orientation, to take into account criteria of import substitution", - he added.

Deputy Executive Director of the Association of Mining and Metallurgical Enterprises Maksim Kononov, in turn, AMME voiced proposals on taxation of subsoil users.

"AMME proposes to provide the norm of direct action for provision of reduction factors for mineral extraction tax for low-profit fields. Today discounts on MET are adopted by the decision of the Government and in practice the procedure for consideration of applications is rather long. In this connection, it is also proposed to increase the profitability threshold for the granting of discounts, since, according to the current procedure, any field with a margin greater than 0 percent is considered to be profitable", - he said.

Also, according to Kononov, Association of Mining and Metallurgical Enterprises offers originally to envisage reduction coefficient for minerals extracted at depth (500 m) in view of the fact that their development requires a lot more investment and without the provision of such incentives, it is often unprofitable.

The expert said that the association has proposed to abolish the excess profit tax for subsoil users of solid mineral resources.

"Currently at the site of MNE are also discussed the question of fuzziness of "tax frontiers" between contracts for exploration and production. Implementation of this proposal would significantly contribute to attracting financing for exploration", - he concluded.