Kazakh copper producer Kazakhmys has secured a bigger-than-expected $2.7 billion loan from China in a sign of strengthening ties between the two countries, the head of Kazakhstan's state welfare fund said. China has invested $13 billion into the oil-rich former Soviet republic this year through a series of energy sector acquisitions and loans as part of its wider regional strategy to secure supply of resources.
The money has come in very handy a time when Kazakhstan's other potential benefactors - Western Europe and Russia - have been mired in recession. Kazakhmys will use its loan from China's state-run Development Bank to develop its Bozshakol copper project. It had originally expected to get a $2 billion loan.
"Such a big project, for $2.7 billion, will stimulate the development of other production areas (in the metals sector) through a multiplication effect," Kairat Kelimbetov, the head of Kazakh state welfare fund Samruk-Kazyuna - a shareholder in Kazakhmys - told Reuters in an interview.
China's investment could help Kazakhstan diversify its economy away from oil and metals exports, dependence on which deepened the economic impact of the global financial crisis. It could also provide a market for new Kazakh goods. "I think we have an access to an ocean, not an ocean of water but an ocean of opportunities; the major driver of the global economy lives... and develops next to us," Kelimbetov said.
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